Prices firm on low slaughter

The country's largest meat concern, Tyson Foods are to report a $97 million loss for the second quarter of 2006. This is largely due to the huge losses in beef processing which resulted from the discovery of BSE. This may contribute to a first annual loss in many years.

Meanwhile, Swift & Company are selling their remaining cow business (not steers and heifers). This will include their Omaha, Nebraska plant and assets in Nampa, Idaho.

The Armour, Omaha plant currently has a throughput of around 4,500-5,000 cows/week while the Nampa plant has been closed for some time.

The buyers are XL Foods Inc, owned by the Nilsson Brothers Group, the biggest Canadian beef processors. XL have facilities in Alberta and Saskatchwan, processing more than 450,000 head/year.

It is thought that XL will reopen the Nampa plant once Canadian cows are allowed to enter the US once more.

Swift recently reported third quarter sales of $2.25 billion, slightly down on the same period last year. While beef business is said to have perked up somewhat in the US they suffered declines in their Australian beef operations.

Overall, the company reported a pre-tax loss of $30 million against $4 million the previous year.

The bad news keeps coming for the big meat packers with a law suit deciding in favour of the cattlemen and giving a unanimous $9.25 million verdict against Tyson, Swift and Cargill. It was claimed that the companies had profited from incorrect boxed-beef prices published by USDA during a six-week period in 2001. National Beef was found not guilty and the other three immediately announced that they will appeal. Tyson could be liable to pay $4 million, Cargill $3 million and Swift $2.25 million.

On the plus side, Cargill have reported that their net income for the third quarter was up from $366 million to $370 million. And Smithfield Foods are carrying out a substantial expansion at their Tolleson, Arizona, meat plant, to increase kill capacity from 1,800 to 2,500/day.

US raw hides sold for export in the four-week period to April 6 once more saw China in top position with 1,051,700 and Korea yet again in second place with 374,800 and Taiwan in third place with 341,500. Next in line was Hong Kong with 142,200 followed by Japan with 116,800 and Mexico with 87,600.

This gave China and Hong Kong a combined total of 1,193,900, which compares with 1,439,200 during our last four-week review.

Thailand was in seventh place with 74,100, the Dominican Republic bought 12,800, Italy purchased 11,300, Vietnam 10,100 and Croatia 6,000.

Smaller quantities went to Canada with 3,800 while Spain and the United Kingdom both took 700.

Italy also purchased 16,900 calf and kip, Japan 13,100 and the Netherlands 2,700.

On the wet-blue front, Hong Kong was once again in first place with 152,500. Italy took second position with 60,400 followed by Thailand with 44,700.

The Dominican Republic bought 41,000, Korea 32,700, Taiwan 28,400, Mexico 27,800 and China 27,700. This gave China and Hong Kong a combined total of 180,200 against 194,500 a month earlier. Indonesia contracted for 16,000 and Japan 2,500, while Portugal, El Salvador and Canada all purchased 1,300 with Spain close behind with 1,200.

Hong Kong and China together purchased 3,016,400lb of wet-blue splits. Other contenders were Indonesia with 761,600lb, Mexico 134,200lb, Taiwan 100,000lb and Korea 94,000lb.

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