CHICAGO: U.S. Agriculture Secretary Sonny Perdue ordered an investigation into widening prices between cattle and beef on Wednesday after a recent fire at a Tyson Foods Inc slaughterhouse in Holcomb, Kansas, shut the plant.
Profit margins for the packers are above US$400 per head of cattle slaughtered, up from around US$150 before the fire and well above the previous record of US$308, according to Denver-based livestock marketing advisory service HedgersEdge.com. But the USDA's investigation"demonstrates the government's understanding of the extreme strain placed on the cattle industry by the plant fire," said Jennifer Houston, president of the National Cattlemen’s Beef Association.A small number of large packers dominate the U.S. beef sector, which has fueled complaints among some farmers about the power of the companies over cattle and beef prices.
"I don't think they have a choice but to launch an investigation given the backlash out in the country," he said.