click image to zoom I begin today with an apology to Cargill for my erroneous report yesterday that the company would close its Dalhart, TX feedlot. I wasn’t alone in the error but I’m certainly responsible for mine and hope that it did not cause undue difficulties for them or any DLR readers. - Steve Meyer
With that said — the rest of yesterday’s edition remains germane to the current situation in the beef industry and published reports in Meat & Poultry and the Dodge City Daily Globe indicate that Cargill is in fact making changes in response to falling cattle numbers by reducing the work force at its Dodge City harvest facility. The Daily Globe cited “sources inside the plant” as saying 250‐350 employees would be laid off.
The plant reportedly employs about 2700 workers at present. The article quotes Cargill spokesman Mark Klein saying “Aligning production with the available supply for harvest will enable the plant to run more efficiently.”
The story cites another source stating that “the remaining workers will likely see more consistent 40‐hour weeks and overtime possibility as the plant keeps its workforce a little right . . “
Tight cattle supplies have resulted in steer and heifer slaughter (and this is the class of animals processed at Cargill’s Dodge City plant) 3.5 percent lower than in 2013, year to date based on weekly data. Recall that analysts expect the inventory of cattle in feedlots with capacities of 1000 head and over to be close to last year’s level in today’s Cattle on Feed report from USDA. That would mark three months in a row of close to year‐ago inventories after 7 months of sharply lower feedlot numbers that eventually led to the lower slaughter numbers we’ve seen this year.
When these “close to year‐ago” feedlot numbers begin to reach market weight in July and August, plants may find it possible to return to more normal operating rates. We think cattle availability issues loom large again next fall and winter, however, as today’s tight feeder cattle supplies and almost‐certain smaller 2014 calf crop push placements lower again in the late summer and fall.
So how are pork plants handling PEDv‐shortened hog supplies?
The PEDv situation is fundamentally different from the cattle situation. The former is — as of now — a pretty transient situation in which pig numbers are reduced for a period of time before returning to more‐or less normal levels. The period for an individual farm is 3‐6 weeks but for any geographic area that must deal with an outbreak, supply reductions may last for a few months depending on the speed at which the virus spreads. We say “more‐or‐less normal” because some farms get back to