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Tyson Boosts Canada Beef Output as U.S. Bans Cattle (Update1)
May 11 (Bloomberg) -- Tyson Foods Inc., the world's largest beef processor, said it will boost production capacity at a plant in Alberta by 24 percent next month as a ban on Canadian cattle imports limits supplies for the company's U.S. facilities.
A $17 million expansion at the Brooks, Alberta, plant will increase production capacity to 4,700 head of cattle a day from 3,800, Springdale, Arkansas-based Tyson Foods said today in a statement. Tyson is running its U.S. beef processing plants at reduced levels because of the shortage of finished cattle.
The expansion ``will help address the backlog of cattle caused by the continued closure of the U.S. border,'' Chief Executive John Tyson said in the statement. Tyson Foods historically gets about 3 percent to 5 percent of the cattle it slaughters from Canada, the company said.
The U.S. meatpacking industry will permanently lose jobs to Canada unless the ban on Canadian cattle, imposed two years ago after mad cow disease was found in Alberta, is lifted, Agriculture Secretary Mike Johanns has warned. In March, he said Canada's processing capacity had increased 20 percent in the past year and may increase another 10 percent by the end of 2005.
The expansion at Tyson's Brooks plant is expected to create as many as 300 jobs, the company said.
Injunction Blocked Imports
The U.S. had planned to resume cattle trade with Canada on March 7. A federal judge in Montana halted the plan before it could take effect, ordering a trial on a ranchers group's argument that Canadian cattle posed a threat to U.S. consumers and livestock. The trial is set for July 27.
The U.S. Justice Department, joined by Tyson Foods and other beef packers, asked the U.S. Court of Appeals for the Ninth Circuit to overturn the judge's decision and allow imports of Canadian cattle to resume immediately. Tyson, in its brief to the San Francisco-based court, said the judge's order barring shipments of younger cattle was ``riddled'' with errors.
``Given the risk management system in place between Canada and the United States, there is no basis for barring the importation of cattle less than 30 months of age,'' the company argued. Both the U.S. and Canada require beef packers to remove the spinal cord and other tissue thought to contain the agent that causes mad cow disease at slaughter.
Before the import plan was halted, the USDA had estimated Canada would ship about 1.8 million head of cattle to the U.S. this year. The U.S. slaughters about 35 million head of cattle annually.
All four confirmed North American cases of mad cow disease, which has a fatal human variant, were in animals born in Canada. They include the dairy cow found with the disease in Washington state in December 2003.
Shares of Tyson Foods rose 14 cents to $18.34 at 1:11 p.m. in New York Stock Exchange composite trading. The stock has fallen 6.9 percent from a year ago.
To contact the reporter on this story:
Daniel J. Goldstein in Washington at [email protected].
Last Updated: May 11, 2005 13:19 EDT
May 11 (Bloomberg) -- Tyson Foods Inc., the world's largest beef processor, said it will boost production capacity at a plant in Alberta by 24 percent next month as a ban on Canadian cattle imports limits supplies for the company's U.S. facilities.
A $17 million expansion at the Brooks, Alberta, plant will increase production capacity to 4,700 head of cattle a day from 3,800, Springdale, Arkansas-based Tyson Foods said today in a statement. Tyson is running its U.S. beef processing plants at reduced levels because of the shortage of finished cattle.
The expansion ``will help address the backlog of cattle caused by the continued closure of the U.S. border,'' Chief Executive John Tyson said in the statement. Tyson Foods historically gets about 3 percent to 5 percent of the cattle it slaughters from Canada, the company said.
The U.S. meatpacking industry will permanently lose jobs to Canada unless the ban on Canadian cattle, imposed two years ago after mad cow disease was found in Alberta, is lifted, Agriculture Secretary Mike Johanns has warned. In March, he said Canada's processing capacity had increased 20 percent in the past year and may increase another 10 percent by the end of 2005.
The expansion at Tyson's Brooks plant is expected to create as many as 300 jobs, the company said.
Injunction Blocked Imports
The U.S. had planned to resume cattle trade with Canada on March 7. A federal judge in Montana halted the plan before it could take effect, ordering a trial on a ranchers group's argument that Canadian cattle posed a threat to U.S. consumers and livestock. The trial is set for July 27.
The U.S. Justice Department, joined by Tyson Foods and other beef packers, asked the U.S. Court of Appeals for the Ninth Circuit to overturn the judge's decision and allow imports of Canadian cattle to resume immediately. Tyson, in its brief to the San Francisco-based court, said the judge's order barring shipments of younger cattle was ``riddled'' with errors.
``Given the risk management system in place between Canada and the United States, there is no basis for barring the importation of cattle less than 30 months of age,'' the company argued. Both the U.S. and Canada require beef packers to remove the spinal cord and other tissue thought to contain the agent that causes mad cow disease at slaughter.
Before the import plan was halted, the USDA had estimated Canada would ship about 1.8 million head of cattle to the U.S. this year. The U.S. slaughters about 35 million head of cattle annually.
All four confirmed North American cases of mad cow disease, which has a fatal human variant, were in animals born in Canada. They include the dairy cow found with the disease in Washington state in December 2003.
Shares of Tyson Foods rose 14 cents to $18.34 at 1:11 p.m. in New York Stock Exchange composite trading. The stock has fallen 6.9 percent from a year ago.
To contact the reporter on this story:
Daniel J. Goldstein in Washington at [email protected].
Last Updated: May 11, 2005 13:19 EDT
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