February 16, 2004

Swift & Co Cuts Beef Production In Mad Cow Aftermath

Swift & Co., has been forced to trim one shift at two of its beef production plants because of the loss of beef exports following the discovery of mad-cow disease, the company said Friday.

"Based on the far-reaching effects of...BSE...including prolonged closure of international trade borders to U.S. beef products and the economic hardship caused by the inability to import lower-priced Canadian cattle, Swift & Co. is temporarily suspending operations on the second shift at its beef processing plants in Greeley, Colo., and Grand Island, Neb., effective Monday, Feb. 16," the company said in a press release.

The two plants, which each employ from 2,600 to 2,700 and process 2.8 million cattle annually, will be closed on the second shift for one week during a time when the U.S. beef processing industry is operating at a financial deficit, the company said.

"Given the current economics of the U.S. beef industry, domestic processors must make difficult decisions to protect their operations, their employees and employees' families," said John Simons, president of Swift & Co., the U.S.'s third-largest beef and pork processor, in the release.

Simons said the closure of international trading borders has changed the economics of cattle processing. "In addition to the loss of boxed beef sales to foreign markets, the U.S. beef industry has lost markets that will pay premium prices for products that aren't valued by American consumers," Simons said. "This has created a domino effect which is placing significant downward pressure on the wholesale price of domestic beef cuts.

"Unless the Canadian border opens quickly to live cattle under 30 months of age or other international borders open to beef exports, those post-BSE changes in the marketplace may inevitably result in either an increase in the wholesale price of finished goods or a decrease in the live cattle price," he said in the release.

Simultaneously, beef processors in Canada - where, ironically, the BSE- infected animal found in the U.S. is believed to have originated - are working extended hours and realizing windfall profits while U.S. processors have been working reduced schedules ever since Canadian borders were opened to boxed beef from animals under 30 months of age, but kept closed to U.S. processors seeking to import those same animals.

"The continued closure of the U.S. border to live Canadian cattle under 30 months of age - which all available science indicates are safe for processing -  is a serious blow to U.S. beef processors," Simons said in the release.