It’s been more than a month since Tyson Foods shut down its beef processing plant in Joslin, Ill., and for regional cattle feeders, the financial fallout has only deepened.
Third-generation producer Shannon Frankenreider owns a 1,200-head cattle confinement building in Annawan, Ill., manages more than 600 cows and farms in Henry and Bureau counties. The heart of his operation is about 25 miles from the shutdown plant in Joslin. He says if he sells animals today, he’s taking a pay cut.
“We were selling $261 [cwt.] fat cattle here a few months ago, and now we’re down to the high teens this week,” he says. “So we’re talking $600 a head off these fat cattle, so significant financial [loss].”
Frankenreider hasn’t sold to Tyson in years. But like many cattlemen in the area, he’s experiencing the ripple effects. According to John Nalivka of Sterling Marketing Inc., the Joslin plant had a daily harvest capacity of 3,100 head and employed more than 2,000 people.
Frankenreider says fat cattle in his area typically sell for the highest prices in the country. Regional cattle grade exceptionally high — high percentage Choice and Prime — due to proximity to corn and farmer-feeder feeding practices, creating fierce competition among regional packers.
“Our basis was probably $1 to $3 better than western Iowa, eastern Nebraska, or Iowa-Minnesota average,” he explains. “I just hope we don’t lose that basis. I’m afraid that’s what’s going to come, that we’re going to be more in line with the western bids now.”
Committed Cattle Rerouted or Held on Feed
Outside of Geneseo — just 7 miles from Joslin — BJ Weber owns a custom feedyard. He typically sells about 90% of his customers’ cattle to Tyson, but did not have any sold at the time of the closure.
“We had some contracts, too, that we won’t be able to do anymore for them. So it changed our operation significantly,” Weber explains. “Good or bad, none of ours had to go out to Dakota City.”
Josh St. Peters, executive vice president of the Illinois Beef Association, says cattle that were sold before the Joslin closure were taken to other Tyson facilities or remain on feed. “It’s our understanding from Tyson that there were approximately 15,000 head of cattle that had been committed and could not be delivered.”
Because Tyson’s bid wasn’t competitive the following week, Weber sold cattle to plants in Wright City, Mo., Aurora, Ill., and Tama, Iowa. “It didn’t help that that week we lost Souderton out in Pennsylvania too,” he explains. “We did send some cattle out there too. ...Probably most everything we went to shut down that week.”
Tyson Buyers Return to the Table
Now, more than a month after the shutdown, salebarns in the Midwest are seeing Tyson back in the mix.
“Things have kind of come back to normal,” says Mark Clarke, vice president and chief operating officer for Equity Cooperative Livestock Sales Association. The co-op has 14 different livestock marketing and reloading facilities across the Midwest.
“We have Tyson buyers back in our markets, or we’re starting to do contracts with them again,” he says.
In Tyson’s announcement that it would shutdown the Joslin facility, it noted it was considering adding a second shift to its Amarillo, Texas, facility. Patrick Linnell, CattleFax market analyst, says although the Joslin closure hurt local producers, it’s important to remember the industry overall has the capacity to harvest the cattle in northwestern Illinois.
“That’s (Amarillo) a long ways away from Illinois and that certainly will also be contingent largely on the flow of Mexican feeder cattle coming in, so that’s a ways down the road, but it is something to have our eye on,” Linnell explains.
A Potential Opening for Local Processors
Linnell says he believes with a larger plant no longer in business, it could mean local processors get a bigger bite of the market. “I think regionally, it probably does provide some more opportunities for those small and then even mom-and-pop sized facilities,” he says.
That includes locally owned facilities like the Carroll County Locker in Lanark, Ill. Owner Shawna Houzenga has been answering more calls for appointments, and she has the next three months booked solid.
“Maybe some of it has to do with the Tyson closure,” she says. “But other than that, it’s just basically people trying to get their cattle in, or sometimes we have people that cancel.”
Despite the closure, and the push from the current administration to support small processors, Frankenreider says it can’t make up for a giant like Tyson.
“There’s just no possible way the packing plants are going to pop up in all these towns,” he says. “Sure they’re over-regulated, let’s make life easier on them, but we’re out here raising cattle. We’re not going to be processing our own cattle. I don’t have time to do it. So, we still need the packers.”
Could There Be a Buyer?
At the Farm Progress Show in Boone, Iowa, Secretary of Agriculture Brooke Rollins said the Tyson plant in Joslin would not be sold to a foreign buyer. In a Reuters article, Tyson disputes the claim and says they would sell to “any able buyer.” Following the article, a USDA spokesperson reconfirmed “Secretary Rollins stands by her statement.”
A spokesperson for Illinois Governor J.B. Pritzker says: “The State of Illinois continues to work to identify a path forward for the Joslin facility and is actively engaging with interested parties who may be interested in its future. We are also working closely with the Illinois Beef Association as we explore potential options.”
The spokesperson reports conversations are ongoing. The Illinois Department of Commerce and Economic Opportunity will mobilize a rapid response team to help workers impacted by the closure receive information. In August during a campaign stop, Pritzker announced Tyson wanted to sell the plant if they could find a buyer. Pritzker was quoted saying, “So you know what? The state of Illinois is working like hell to find one.”
Who Prices the Cattle Then?
The Joslin plant was a vital link connecting Midwest feedlots to consumers’ plates. But for Frankenreider, the long-term threat runs deeper than the immediate blow to local bank accounts — it threatens the backbone of price discovery.
“It’s the farmer-feeders that set the weekly price, and a lot of the corporate yards base their price off the farmer-feeder,” he warns. “Once we’re gone, who’s gonna price the cattle then?”
