Beef Market "UGLY"- Tyson eyes China and Brazil

[Oldtimer]

Today 1/30/2006 11:42:00 AM


Tyson Calls Beef Market 'Ugly,' Sees Leading To 2Q Loss



A strike at one of its Canadian plants cost Tyson $9 million in the first quarter. Higher energy expenses also contributed to quarterly net earnings of $39 million, or 11 cents a share, compared with $48 million, or 14 cents a share, a year earlier.



Tyson's near-term guidance is for a "difficult" time. "Chicken will be tough going forward, beef continues to struggle...and pork should be OK but fall short of expected returns," Chairman and Chief Executive John Tyson said on the call. He spoke of a "continued tough environment" for the Springdale, Ark., company.



Elaborating on the outlook for chicken, President Bond said that prices have softened but grain costs "appear in good shape. Demand will be the key factor going forward, domestically and internationally."



Overseas consumer concern about avian influenza, which originates in poultry, contributed to a downtick in chicken sales in the fiscal first quarter.



Executives disclosed that Tyson was in due diligence talks with an unnamed Chinese poultry company.



Tyson executives also said they are taking a hard look at Brazil, for possible acquisitions of plants or "green fields" for a startup facility.



The company's CEO said he hoped to be able to announce the appointment of a new chief financial officer soon. Tyson has been operating with an interim CFO.

 

[Oldtimer]

I suppose its just coincidence that a month ago the USDA announced they would begin allowing imports of chicken products from China (even during the huge avian flu concerns :roll: )-- and now Tyson announces they have due diligence talks with a Chinese poultry company :???:

Now that Tyson is looking for "greener fields" of Brazil for startup facility's-- will USDA be announcing we are beginning beef imports from Brazil next month?..

USDA gives the best rulemaking Tyson can buy-- USDA Inc...

 

[houstoncutter]

Well said Oldtimer, you hit the nail right on the head!!!!!

 

[Oldtimer]

Heres an article I found on another website- Pretty well sums up how the Big Corporate interests have free rein now with the control they have over the USDA, and can do whatever they want...

The real sad thing is that the author is so correct about the so-called producer groups like NCBA and NPPC- but I expect no more from them since they have been bought out and are totally controlled by the Big Corporate interests for sometime now....

Like Guebert says "SHAME ON YOU NCBA"....
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P&S toothless watchdog



USDA watchdog still missing its teeth

Alan Guebert - Commentary

PEORIA JOURNAL STAR

January 31, 2006



For nearly a decade the Packers and Stockyards Administration, the U.S. Department of Agriculture watchdog to ensure competitive, fair livestock markets, has been little more than a sleeping dog, according to a devastating, 36-page report released by USDA's Office of Inspector General Jan. 18.



Indeed, notes the OIG in the undressing of the Grain Inspection, Packers and Stockyards Administration, (at http://www.usda.gov/oig/webdocs/30601-01-HY.pdf), P and S oversight of livestock markets and meatpackers has been so lax since 2000 that "no competition and complex investigations were being done."



USDA's own indictment of the one USDA agency American meat and poultry producers have daily contact with is repeatedly clear on that point: For years, Packers and Stockyards has not turned one stone to ensure U.S. livestock markets are fair, nor has it found one meatpacker misstep in an industry that drips with both collusion and blood.



But the point is not new. A similar 1997 OIG investigation recommended a wholesale overhaul of P and S structure and policies to better monitor and regulate the swiftly integrating, quickly consolidating meat industry.



Three years later, a September 2000 Government Accountability Office follow-up found a vastly restructured watchdog, but not a reinvigorated one. P and S "investigative methods," said the GAO, still had not been "designed for addressing complex anticompetitive practice concerns" that had taken firm root in the livestock sector.



Now arrives the third P and S indictment in less than a decade. Its first line could have been lifted from the previous two. "The Grain Inspection, Packers and Stockyards Administration has not established an adequate control structure and environment to oversee and manage its investigative activities."



Facts contained in the OIG report make a chilling and infuriating case of P and S ignorance, incompetence and failure:



- Records on 1,799 of the 1,842 market investigations P and S said it was conducting as of June 30, 2005 were so incomplete the OIG could "not identify the location of the work performed."



- Most of the "investigations" were, in fact, fake, explained the OIG. "Our review of the complaints and investigations log... (reveals) all types of work performed (i.e., monitoring activities, sending routine correspondence, or performing on-site reviews) as investigations, which would inflate the number of investigations reported as completed in the agency's annual performance report."



- The bad records, the cooked numbers and P and S's "weak management control" meant "...no referrals were being made to the Office of General Counsel (USDA prosecutors) for administrative action."



In short, this meatpacker watchdog and market regulator was nothing more than a flea-bitten shadow of what Congress envisioned when it passed the Packers and Stockyards Act of 1921. It did little but create paper, then shuffle it.



All led to nowhere. "OGC filed no administrative complaints against market participants for anti-competitive practices since 1999 due to lack of (P and S) referrals," summarizes the report.



And all of this as the American livestock-producing and meatpacking sectors were experiencing a tidal wave of consolidation and integration.



As revealing - and sickening - as this latest P and S report is, none of it is even mildly surprising to groups like the Organization for Competitive Markets and the Ranchers-Cattlemen Action Legal Fund (R-CALF). Both have screamed bloody murder about the catatonic P and S for years.



Likewise, just as predictable has been the silence of livestock groups like the National Cattlemen's Beef Association and the National Pork Producers Council since the report's release. Neither of the packer-linked groups has even noted the existence of the OIG report.



Golly, can't one NPPC or NCBA producer-official at least acknowledge that part of the packer-partners' success in squeezing poultry, pork and beef growers into near extinction is because of the blind poodles at Packers and Stockyards?



Evidently not, and the silence, like the OIG report itself, is confirmation of the cronyism between USDA, agbiz, and producer groups who have linked to all but give up the fight for fair markets, strict oversight, and a strong, independent agriculture.



Shame on P and S, who, again, has been caught red-handed, snoring away.



Shame on USDA which, again, finds more time to tout agribusiness than regulate it.



And shame, shame on farm groups who let it happen.