Tyson Foods told cattle feeders on Friday that next week it will add $5 per cwt. to live cattle and $7.94 per cwt. to dressed and grid cattle. The increase will be added to the base cash price for the week.
Gary Michelson, Tyson Foods director of media relations, told Drovers in a Saturday morning email the one-time premium is an effort to demonstrate the company’s commitment to cattle suppliers.
“As an American company supporting the agricultural backbone of this country it is imperative during this national state of emergency, we not only support our customers, but our cattle supply partners as well by ensuring the long-term sustainability of the beef business,” Michelson wrote.
“Without the pipeline of high-quality cattle, we would not be able to deliver on meeting the needs of our customers and consumers. It is for these reasons Tyson Fresh Meats is providing a one-time premium effective for cattle harvested the week of March 23rd, in an effort to demonstrate our commitment and support of our valued cattle suppliers. This is an unprecedented time and the intent of our response is to show our support in an effort to help our supply partners weather this extraordinary situation.”
Tyson Foods operates 6 beef packing facilities in the U.S., harvesting an average of 155,000 head of cattle each week.
Grocery meat cases have been emptied over the past two weeks as consumers gather food items in preparation for home isolation. The resulting retail demand caused a rapid spike in beef cutout prices of $47.74 last week, with the Choice boxed trade closing Friday at $253.75.
Cash fed cattle traded from $105 per cwt early in the week to $113 at the end of the week. The spike in the beef cutout price meant beef packer margins may have exceeded $400 per head for the week.
No announcement of a similar assistance payment from other packers has been made.