October 25, 2013

 

Tyson halts buying Canadian cattle

 

In order to reduce costs, Tyson Foods Inc., the biggest US meat processor, stopped purchases of Canadian cattle shipped directly to their beef plants.

 

According to Worth Sparkman, Tyson's spokesman, the company stopped buying in mid-October after US rules that require labels to show where an animal was born, raised and slaughtered signalled higher expenses.

 

The company, based in Springdale, Arkansas, doesn't have enough warehousing capacity to accommodate those products, he said.

 

The Canadian Cattlemen's Association says Tyson is the third-largest buyer of Canadian cattle. The company will continue to buy Canadian-born animals sent to US feedlots. Sparkman declined to say how many animals were bought for US beef plants for processing.

 

Tyson bought about 3,000 cattle weekly from Canada, and the nation's exports probably will decline more than 150,000 head a year, Brian Perillat, a senior analyst at Canfax, said in a telephone interview.

 
Its Pasco plant in Washington State is a large buyer of animals from British Columbia and Alberta, and producers in parts of the Prairies will have to pay more to ship animals elsewhere, Dennis Laycraft, the executive vice president of the cattlemen's association, said in a telephone interview from Calgary.

 

Feeder-cattle exports may increase by 100,000 head if US companies decide to buy them as a substitute to fattened animals, Perillat of Canfax said.

 

Canada's feeder-cattle weekly exports to the US have climbed to 7,000 to 9,000 from 1,000 to 2,000 a year earlier, Perillat said.

 

Live-cattle exports to the US have declined as much as 40% since the original label rules were effective in 2009, Laycraft of the cattlemen's association said. Canada shipped 709,000 head this year as of September 14, including 500,000 directly to processing plants, he said.

 

The association joined a group of meat and livestock groups in Canada and the US that filed a lawsuit in July against the USDA to block the amended label rules. The rules cost Canadian producers as much as CAD40 (US$38.37) per head, or CAD640 million (US$615 million) a year, the association said in May.

 

JBS SA and Cargill Inc. are the biggest buyers of Canadian cattle for the US, according to the cattlemen's association.