Old Timer,
Your R-CULT buddy Sandman drew first blood when he called me a "liar" in regards to this issue which pales in comparison to anything I have called him. He drew second blood when he tried to weasel out of the bet. At least he's back in the game now left with little choice after using his own words against him. I see you are making great contributions to this thread with your depth of knowledge on the issue Old Timer. Perhaps you could bring us each a glass of water when the time comes. I think you are qualified for that as well as cheerleading.
Sandman: "Fine, SH, whatever. You want to talk just Tyson now, even though your comment to Kaiser concerned both Cargill and Tyson, fine. Let's have it your way and just use Tyson, then. Forget about Cargill. You can't prove your statement with just their numbers, either."
I'm glad you decided to stand behind your words Sandman!
Oh, BTW, the month I needed was just a bluff to get you to take the bet.
I can and will provide the proof that the losses in Tyson's plants in Boise, ID and Pasco, Washington were more than the gains in Tyson's Lakeside plant in Alberta.
When you qualified the NW, you eliminated Cargill from the equation because Cargills furthest NW plant is either Fort Morgan or Greely, CO. When referring to the NW, I was always referring to Tyson's plants in Pasco and Boise which is why I made the statement in the first place. I had read how much they had cut back their shifts due to a lack of Canadian cattle.
I still contend that the gains in Canada's Cargill plant/plants were also overshadowed by the losses in Cargill's U.S. plants based on the same problems occuring in reduced shifts in Cargill's U.S. plants but as you pointed out, hard Cargill financial data is not available, only statements from Cargill which I will provide.
As you said, we will focus on Tyson's NW plants in Boise, ID and Pasco, Washington compared to Tyson's Lakeside plant in Alberta.
I already have that proof.
I found the article I was looking for that discussed this which is why I made the bet.
I also went directly to the source at Tyson to confirm what I had read.
Here was the conversation I had with Tyson's head of cattle procurement:
SH (paraphrasing): "I am conducting research on the economic impact of a closed Canadian border. I also have a $100 bet riding on this. Based on what I have read, I am under the impression that the financial losses in Tyson's Boise, ID plant and Tyson's Pasco, Washington plant were more than the financial gains in Tyson's Lakeside plant."
Tyson representative (in response): "WAY MORE. Take my word for it."
Sandman, if you want to confirm this conversation, I can give you the name of the individual I talked to at Tyson, via PM, to confirm this. I talked to this person by phone.
That should be all that is required since Tyson has no reason to lie about this but this simply backs up the information that I had read previously that I will provide when I get it all compiled.
Randy: "Yip, SH is cornered."
Hardly!
Randy you are wrong on this from every standpoint particularly in your wild conspiracy theory that Tyson wanted the border to stay closed. Even R-CULT knows better than that.
Randy: "Help me out with this one. According to their web page Tyson foods has two plants in the American NW; Pasco Washington, and Kuna Idaho."
I have read the Idaho plant as Boise, ID but you are correct.
Randy: "Cargill seems to have nothing closer than the Fort Morgan plant in Colorado. Kansas, Texas, Nebraska, and Pennsylvania are all quite a ways from Brooks Alberta and the major feedlots of Alberta. I guess there may have been a few live cattle moved from Alberta into Nebraska, but I doubt like hell that any were ever trucked to Texas."
That is correct. The furthest N. Cargill plant is in Greely or Fort Morgan, CO which is why my NW specification eliminated Cargill from the comparison.
Randy: "Like I said, how big are the two Tyson plants in Pasco and Kuna and have they had seen the EXCESSIVE losses to match the EXCESSIVE profits in the Brooks plant."
Why are you asking Agman now? You seemed bold enough to call it a fairy tale the other day. Getting nervous?
25% of the needs of the Pasco plant were from Canada. The Pasco plant was reduced from a 45 hour week to a 24 hour week for an extended period of time while workers were still receiving pay for a 32 hour week. Now you stop and think about that. Boise, ID was reduced to 16 hours per week. Another aspect of this financially is the fact that Pasco relied heavily on the export markets FOR THOSE HIGHER GRADING CANADIAN CATTLE which is indirectly linked to the loss of Canadian cattle.
In contrast, much of the profits in Tyson's Lakeside Alberta plant were lost due to SRM removal. I will post that information as well.
Once again, the packer blamers like you and Sandman only see the small picture, not the economic reality of running a packing plant.
Randy: "Whether the question is simple or whether it is complex, SH will find a way to wiggle out of his Fairy Tale. Are you here to back him up Agman, or to simply say "I didn't say that!" Or are you here to prove good old SH wrong for once."
Does it look like I am wiggling Randy?
If Agman has any information to contradict what I have already collected, by all means bring it. Like I said many times before, being accurate is more important to me than being right.
I have a lot of information to present so I'll start with this first:
From Cattle Buyer's Weekly
November 8, 2004
TYSON HAS BIG LOSSES AT PASCO
Tyson Fresh Meats continues to operate it's Pasco, Wash., beef plant at a substantial loss. The U.S. ban on Canadian cattle and ban on the U.S. beef exports means the plant has run this year at 32 hours or less per week. Because of the losses, Tyson has asked it 1500 unionized workers to accept a one-year wage freeze. Tyson guarantees its workers a 32 hour week. The plant has operated at times at only 24 hours per week but Tyson paid them for 32 hours.
The continued U.S. ban on Canadian cattle has hurt the plant's overall supply, says plant manager Ray McGaugh. Historically, 10% to 38% (believed to be about 25% on average) of the cattle slaughtered at the plant have come from Canada. Closure has forced Tyson to buy cattle from greater distances, he says. It has also had to run the plant fewer hours which is much less efficient. The ban on U.S. beef has also harmed the plant, which exports almost 20% of the product it produces, he says.
From Cattle Buyers Weekly
February 7, 2005
TYSON WILL KEEP PLANTS CLOSED
Tyson foods will keep several beef processing plants temporarily closed in light of continued losses. Tyson's beef operations had a $16M operating loss in the Oct.-Dec. quarter (Tyson's fiscal 2005 first quarter). Beef processing margins remained negative in January and don't look like improving in February. Tyson Fresh Meats Jan. 10 suspended operations at its Denison, Iowa, West Point, Neb., and Boise, Idaho, slaughter only plants. It also suspended operations at it's Norfolk, Neb., processing plant and halted it's second processing shift at its Pasco, Wash., plant. The plants will remain closed this week (the fifth week) and possibly longer, it says. It will pay qualified workers the equivalent of 32 hours of pay again this week. It will decide sometime this week whether the suspension will go beyond a fifth week, it says.
Market conditions have not improved enough to warrant resuming operations, says chairman and CEO John Tyson. The company needs more cattle to run these plants. The U.S. beef industry is currently out of balance with far more slaughter capacity than available cattle. That's why reopening the U.S. border to Canadian cattle is so important, he says. [DID YOU GET THAT RANDY] Beef profits are unlikely to get much better this month, says analysts. Industry margins were negative by an average $18.80 per head in January according to HedgersEdge.com. February has begun even worse. Margins last week were negative by $49 per head.
CBW [Cattle Buyers Weekly] understands that Tyson's all-in beef processing costs are about $170 per head, whether running the closed plants or not. Keeping them closed will presumably reduce losses by processing fewer cattle. Another negative for Tyson is that profits at it's Lakeside plant in Alberta fell to almost nothing in December. They have since recovered but nowhere near the level of most of fiscal 2004. So Lakeside contributed less in the first quarter than year earlier.
From Cattle Buyers Weekly
February 14, 2005
TYSON WILL REOPEN PLANTS GRADUALLY
Tyson Foods will reopen four closed beef plants on a staggered basis over the next two weeks. It's decision is based partly on an anticipated flow of Canadian fed cattle in early March. Tyson is also anxious to keep as many as possible of the 2100 workers affected by the closures (on Jan.10). It plans to resume production based on the following schedule: Denison, Iowa, Feb 16; Norfolk, Neb. A-Shift processing, Feb 21; West Point, Feb 22; Boise, Idaho, Feb 22; Norfolk B-shift processing, Feb 23, Pasco, Wash., B-shift processing, Feb. 24.
Qualified workers will continue to be paid the 32-hour guarantee while their plants remain idle. Once the plants resume operations, they will likely still operate at reduced levels of production until market conditions improve, says Tyson. While cattle numbers remain tight, supplies will improve in the months ahead, especially as the anticipated flow of Canadian cattle resumes, says chairman and CEO John Tyson. But the company believes the industry remains months away from any meaningful exports to fhe Far East, he says.
Tyson's 11 beef processing plants (10 in the U.S. and one in Alberta) ran at only 74% of capacity in fiscal 2004 (ended Oct 2). That's probably the lowest capacity utilization rate in the history of Tyson Fresh Meats and predecessor IBP. The 11 plants can process 240,000 head per week. Utilization in fiscal 2003 was 84%. In contrast to beef, pork plant utilization was 85% and chicken plants (58 plants) utilization was 95%.
The beef utilization rate might be even lower in Tyson's current fiscal year, given reduced slaughter levels nationally in the fourth quarter of 2004 and so far in 2005. Tyson's plant closures however may not have reduced its utilization levels much, as it raised the levels at the seen U.S. plants that remain operating.
From Cattle Buyers Weekly
May 9, 2005
TYSON LOOKS FOR BIG BEEF BOOST
Tyson Foods looks to a big boost in its beef results after reporting a $19 M operating loss for beef for its Jan-March quarter. That came after a $16M loss in the previous quarter. The losses reflectect the difficult financial conditions that all beef packers have experienced last summer. Tyson cited Canadian live cattle import restrictions, limited access to export markets, weaker domestic demand and competing protein supplies for the loss. But results should improve as supplies of domestic cattle increase, it says. President Dick Bond expects beef to be profitable in Q3 and Q4 (April through September) he says.
Tyson Beef in fiscal 2004 had an operating loss of $31M in the first two quarters (although that included $61M in BSE charges). It had $158M in operating income in the second half. So Tyson Beef in fiscal 2004 (ending Oct 2) had operating income of $127M (including $5M of other charges taken in the fourth quarter). Tyson hopes for a similar performance this quarter and in its fourth quarter to put its beef operations solidly in the black for the year. Key to this will be the increase in domestic cattle supplies (it might not peak until September, the last month of Tyson's fiscal year) and whether wholesale beef prices hold up as production increases.
The above information reconfirms what Agman had presented previously.
Here is another quote reconfirming what has been stated above:
"Recent examples of shrinking packer capacity are not just anecdotal. Idaho has seen its packing capacity drop by 51% in the past year alone. John Tyson recently told the NCBA executive Committee that Tyson's Boise plant is operating at 16 hours per week, and it's Pasco plant is at 24 hours per week. These cutbacks have already had a dramatic impact on cattle feeders in the area and the affect on cow-calf producers cannot be far behind."
Goooooooooo R-CULT! Can't see the forest for the trees!
Sandman (previous): "If you have to revert to making up "facts", aren't you backing the wrong side"
Randy (previous): "This bold statement by SH is the most amazing thing I have ever read on this site. SH has somehow figured it out folks. Tyson foods and Cargill lost more in their NW beef packing plants than they made in their two Canadian plant. AMAZING. The man with the facts has come up with a fairy tale that will rival the Three Little Pigs."
Mike (previous): "You know damn well he can't back up his claim with facts"
Sandman (previous): "SH is lying, pure and simple. Everybody should make a mental note on his credibility."
You paker blamers might consider a conference call. LOL!
Before you start picking this apart, give me the time to present the rest of the information I have gathered because it has to be viewed as a whole and not as seperate parts. The information as a whole will prove what the Tyson representative told me and the information in the article I originally read.
Enough for now, I still have more information to sort through and present.
Have a real nice day boys and keep those checkbooks handy.
~SH~
