• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Tyson slowdown vs fed prices

Brad S

Well-known member
I may be suspicous about a slowdown beating down fed beef prices, but $86 feds make me look kinda silly. Perhaps the beatdown during the summer of 06 will never occur.

$3 gas and beef movement like we've enjoyed are shocking. I really fear the luxury of $4 beef vs $2 chicken would be the first place households would look to pay for $3 gas. Wrongo wrongo

0 for 2 and happy about it
 

Jason

Well-known member
It does suggest the feeders have more power than many claim.

The educated ones never sold when the bids were at $78, they knew there were more hooks than cattle.

Not that I care if Tyson lives or dies, but they have to be in real trouble to slow down all their plants.

What might be a concern is who will buy their beef interests if they fail?
 

ocm

Well-known member
Jason said:
It does suggest the feeders have more power than many claim.

The educated ones never sold when the bids were at $78, they knew there were more hooks than cattle.

Not that I care if Tyson lives or dies, but they have to be in real trouble to slow down all their plants.

What might be a concern is who will buy their beef interests if they fail?

Many different people I hope.
 

Jason

Well-known member
ocm, who would want business that went broke?

Tyson supposedly had the ability to switch profits at will, force consumers to buy whatever they wanted to sell, and force feeders to take a loss at every turn.

The facts don't support that. Brad posted $86 fats while Tyson has stepped out of the market by 2/3's.

The real possibility is that the damage done to America's packing sector is permanent. If Tyson fails, very little of its capacity might be taken over.
 

Mike

Well-known member
What might be a concern is who will buy their beef interests if they fail?

Needs to be someone who will take it easy on the multi-million dollar personal bonuses, the free corporate jet escapades, take heed and obey the environmental rules, and maybe slow the lobbying payments to politicians. Among others.
 

Brad S

Well-known member
I'd not even considered Tyson failing, but the chicken biz is struggling also. I wish National would buy ibp Lex and expand USPB, but the Japanese deal has been tough on USPB.
 

Jason

Well-known member
Granted, if jet flights and other high end perks are the only reason Tyson is losing money in beef right now, other better managed companies might be able to squeeze a small profit from it.

However, all packers are in the red right now, does that mean they are all poorly managed?

I have ran the numbers here before to see if a producer owned and supplied plant would fly, not if the buy in cost is full price. If however it is bought at fire sale prices, say 25 cents on the dollar, it becomes almost feasible.

A 4000 hd/day plant 5 days a week, 50 weeks a year kills about 1 million head. If that plant averages a $10 profit, and never loses like they are losing now, 1 year would pay $10 million. At 25 cents on the dollar cost would be more like $37 million. Add in interest and taxes, you are still looking at close to a 10 year payback. An inexperienced management team could easilly lose money more than they make it.
 
Top