By Bob Burgdorfer
CHICAGO, Oct 10 (Reuters) - Two of the top U.S. beef companies said on Tuesday they will be cutting production because of poor domestic and export sales and high cattle prices, while a third company said it will continue operating at reduced levels.
The reductions had been expected because beef companies have been losing money for several weeks, analysts and economists said.
High gasoline prices and higher interest rates have reduced consumer spending and hurt beef sales, they said. Also, an abundance of lower-priced pork and chicken have pulled business away from beef.
Top U.S. beef producer Tyson Foods Inc. (TSN.N: Quote, Profile, Research) , and No. 4 producer National Beef Packing Company announced they are cutting production, while No. 3 beef producer Swift & Co. said it will continue operating at reduced levels.
Cargill Inc., the No. 2 beef producer, was not available to comment on its production.
"The timing of this is not a surprise. This is the time of year in recent years when packers have struggled from a profitability standpoint," said Jim Robb, an economist at the Livestock Marketing Information Center.
Tyson Foods said it will slaughter about 12,000 fewer cattle per week for the next six to eight weeks. Swift said three of its four beef plants will operate at reduced hours, and National Beef said beginning this week it will cut production 7.5 to 23 percent at its two beef plants.
"We do not expect market conditions to improve for several months," National Beef said in its statement. Continued...
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CHICAGO, Oct 10 (Reuters) - Two of the top U.S. beef companies said on Tuesday they will be cutting production because of poor domestic and export sales and high cattle prices, while a third company said it will continue operating at reduced levels.
The reductions had been expected because beef companies have been losing money for several weeks, analysts and economists said.
High gasoline prices and higher interest rates have reduced consumer spending and hurt beef sales, they said. Also, an abundance of lower-priced pork and chicken have pulled business away from beef.
Top U.S. beef producer Tyson Foods Inc. (TSN.N: Quote, Profile, Research) , and No. 4 producer National Beef Packing Company announced they are cutting production, while No. 3 beef producer Swift & Co. said it will continue operating at reduced levels.
Cargill Inc., the No. 2 beef producer, was not available to comment on its production.
"The timing of this is not a surprise. This is the time of year in recent years when packers have struggled from a profitability standpoint," said Jim Robb, an economist at the Livestock Marketing Information Center.
Tyson Foods said it will slaughter about 12,000 fewer cattle per week for the next six to eight weeks. Swift said three of its four beef plants will operate at reduced hours, and National Beef said beginning this week it will cut production 7.5 to 23 percent at its two beef plants.
"We do not expect market conditions to improve for several months," National Beef said in its statement. Continued...
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