March 24, 2020

 

US meat processors give pay hikes to farmers and slaughterhouse workers

 

Tyson Foods and Cargill said the pay hike compensates farmers and employees working around the clock to meet surging consumer demand for meat due to COVID-19, reported Reuters.

 

Consumers have emptied grocery stores and supermarkets as the COVID-19 crisis continues to deteriorate in the US.

 

Tyson Food said it will pay an undisclosed one-time premium to farmers for cattle slaughtered this week. The company faced objections previously on its increased profits.

 

Cattle producers said the payment was US$0.05 / 100 pounds for live cattle and US$7.94 / 100 pounds for dressed cattle.

 

Lee Reichmuth, United States Cattlemen's Association board member and a cattle producer from Nebraska said the payments do not make up for the losses that farmers are experiencing currently.

 

Livestock marketing advisory service HedgersEdge.com said Tyson Foods reported record high margins of US$580 per head of cattle on March 23, 2020. This was US$170 higher compared to one week prior.

 

Margins jumped 20% over the last two weeks for beef cuts shipped to wholesale buyers. Live cattle LCJ0 futures prices in April dropped 7% in the same period as traders were concerned that COVID-19 would shut down slaughterhouses' operations.

 

Sonny Perdue, US Agriculture Secretary said the agency is monitoring agricultural markets, adding that the agency is reviewing price differences from the farm gate to retail.

 

The US Department of Agriculture (USDA) said US beef processors slaughtered more cattle, from 633,000 two weeks ago to 653,000 cattle last week. 

 

Cargill said it is paying its US and Canadian slaughterhouse workers US$2 / hour until May 3, 2020 with an additional US$500 bonus to workers that work weekly shifts over eight consecutive weeks.

 

Other meat producers such as Hormel Foods and Maple Leaf Foods said they will give temporary pay hikes or bonuses to its affected workers.

 

-      Reuters