Friday at 5 pm news broke here that could only be worse if it was that a disease like Foot and mouth hit us.  The Tyson beef plant in Emporia is ceasing slaughter operations within the next 2 weeks, putting 1500 people out of work, and putting the closest market for slaughter cattle 200 miles away.  I live 20 miles from Emporia, and effectively this will probably end finishing cattle for most people in this area.  The effect on our local economy is going to be devastating, my wife who is a speech therapist with the school has been on her laptop trying to figure out how many of the kids she works with will be affected, newspaper reports this afternoon that in one school 50% of the kids are affected.  Nothing like this has ever happened in our area, I guess we now are going to find out how some Michigan towns have looked and felt when their auto plants shut down. 

I have just read your bad news in the Emporia Gazette whilst listening to Rossini's Barber of Seville live from the Metropolitan Opera House New York. What a strange world we live in. It looks like 1500 jobs out of 2400 will go, but that some employees will be able to move further west with the company as it relocates to Western Kansas.

The firm say there are just less beef cattle in eastern Kansas and Western Missouri and that the cost of grain, because of the amount going into ethanols, has caused some farmers to come out of beef.

They say that the slaughter operations will cease in 60 days and employees will be paid up until then.

I wish you all the best KF. Keep us in the picture as to how you will be affected.

    That's terrible news Kf. We hear about that sort of thing often, but that never prepares anyone for it happening in their area. I join Peter in wishing you and all affected the best outcome possible. Ally. 

So sorry to hear that, KF. And we think we have problems here.....

       The closure of any abbatoir and prosessing plant takes away another option point of sale to farmer/producers. We have this problem in our local area, with the closure last August of our local abbatoir. Their main problem was mainly due to the lack of selling ability of their management. Not being able to have your own stock slaughtered for either sale at local Farmers Markets or to private customers has really stiflled us locals. We are now looking at what options there are to either purchase or lease the premises, with a view to re-open. We have to be able to offer some form of competition to the multiples.I must say the lack of help from the large agencies make you wonder who really pulls their purse strings.

          If any one has been in the same situation and has any advice please let me know, Raising the purchase price  doesn't appear to be a problem, it's having the right marketeer and management structure to sustain a viable business that is so important.

        Our local problem is nothing compared to (KF) but if we can solve it, perhaps you can too!!

Good luck KF I hope you find some way round this.

KF, this sounds like you have a very large challenge to stay positive and to think of a way out of this one. My guess is that no one factored in the consequences for livestock producers who rely on grains rather than forage when it came to switching grains to biodiesel. Sure prices will rise for livestock but the time lag is the problem. Given the non-farmer-focused dynamics of the supply chain, it is no surprise that the farmer will be the last to gain the benefits of higher grain prices. What are your options, just focus on grain production? Even if the farmers manage to change direction you still have one major social headache with what must be a very large part of Emporia's workforce being made redundant. The knock-on effects will be as great as the direct effects. I know what the impact is of near zero employment after the total collapse of an agricultural industry, I see it every day. At least on the positive side you have an educated population and an infrastructure that is intact. I just hope you have the mechanisms at State-governance level to deal with the consequences of such a closure and for it to put some immediate effort into creating a way forwards. Stuart

Thanks to all for your comments.  However, this alone is not going to have enough impact on my cattle business to push me out.  It is however going to wreck our local economy something I don't care to be a part of, but will have to be none the less.  Cattle in the states travel long distances, the neighbors brought in 250 steers last winter from Oregon, roughly a 2000 mile haul I think. Our cattle will simply have to travel farther than they would have.  What eventually will happen is many of the people who fatten cattle in this area will probably switch over to selling feeder cattle, something we have already done.  I am more worried about my wife's job, and higher crime from having so many people without work.  There are all kinds of wild stories and theories circulating now, who knows what is true and what is not.  One involves an apartment building where 12 of the 15 apartments were occupied by people soon out of work. What are the odds of the owner of that building filling all 12 of those?  The ripple effect is now the great unknown. 

Tyson shutting down slaughter I think is more of an effort to force fat cattle prices down than is is an indication of their profitability.  Our US cattle numbers had gotten to todays levels long before grain went up.  It was because of Tyson and the other packers not paying anything for the cattle that the lack of numbers is here today, it is their own fault.  Companies like these are notorious for giving multi million dollar bonus checks to the CEOs, then griping about lack of efficiency, and trying to cut wages for ordinary people, and stealing the cattle.  Before cattle prices were good, and the plant in question was still owned by IBP, the company cut wages and was paying about 60 cents a pound for fats, then gave the head of the company a $4 million bonus. 

More of the same old problem, too much reward for people who deliver short-term 'gains' regardless of the long-term consequences. The mistake was to give to much decision-making power to the finance directors of this world as they seem to be primarily concerned about the impact of using discounting techniques on future cash flows. It is no great surprise that the long-term becomes irrelevent when you do a cash flow projection and then multiply anything after about three years by 70%, 60%, 50% or whatever. The further away the smaller the figure. The higher the risk or the greater their lack of knowledge the lower will be the multiplier. It probably must be one of the misused and abused analytical techniques in the history of mankind. It is also largely responsible for the unsustainable nature of the way the Planet is run by business and industry.

Stuart:  The question is, what is to be done about this?  Today the economy is at the forefront of the national discussion in the USA.  The day before our local problem came to light, Ford announced it was laying off 13000.  Business leaders tell us we all need to be more efficient to compete.  However, it seems often neither the producer or the consumer benefit from increased efficiency, the management of the companies are who benefit.  There is talk that the head of Tyson received a $27 million bonus last year.  Can one honestly say they needed to cut the Emporia plant if they made enough money to pay out a bonus like that to one person?  When cattle were cheap, they told us there were too many.  Now, there aren't enough, so they shut down the slaughter end, but is that really the case? 

Bill O'Reilly on FOX news is hitting on the head of Exxon getting a $400 million retirement package, with gasoline at record prices.  O'Reilly says he will never buy another Exxon product and encourages others to do the same.  Can one person really be worth $400 million?  My words I guess hint at Communism, believe me I am a capitalist, but there must be a line.  In my opinion there is a national problem today that even though everyone talks about the "big picture" no one really sees it.  I don't begrudge people in high places earning alot of money, but surely there is a limit.  The current economic model playing out in the US today reminds me very much of the slash and burn farming techniques used in Brazil.  Lets get all we can right now, and down the road who cares about anyone else,as long as we made out like bandits.  The big question is, where is our government?  What the USA needs today is another Teddy Roosevelt, the "trustbuster".  I can't see a rosy future for this country with the people in power now.

KF, can I recommend reading Globalization and its Discontents by Joseph Stiglitz, a very readable and very able economist. Just ignore the fact that he was an advisor to a Democrat President!! It might give you a few ideas when it comes to wondering what is going on. Stuart

KF,

What you are saying reiterates my posting on another site,these so called CEO's are mostly Barrow Boys they cannot run the Business properly so they close it and transfer to another Plant because for a while the other Plant will be running flatout and on paper the Profits will look better but soon reality will catch up and the same problem will occur there because the real problem has not been addressed and usually that is they are in the vicIous spiral of price cutting.The Barrow Boys are not Business people and they never stop in a company very long because they are fly enough to know that this reality is going to catch up with them but they are then perceived as Demi Gods by the Press and Media who are swept along with this uninitiated wave of Bull *** baffleing rubbish that they come out with.They are so fly now that as you say they now demand huge sums for their calculated wrecking and we have seen plenty of it over here.The losers are the Shareholders and the workers and with our troubled Bank Nortern Rock some of the Shareholders demanded a vote on the issue of allowing the new Board of Directors the ability to sell off parts of the Business leaving the Shareholders the non profitable parts to eventually have to liquidate instead of the Profitable part carrying the Company so that the management can get and sort out the reason why part of it is unprofitable.Unfortunatley the Shareholders of Northern Rock only got 66% of the Vote and the Co Articals called for 75% so the Barrow Boys have got their Mandate.

In your Posting you say that Ford is putting off 13000 well Ford own Landrover and Jaguar here and the Barrow Boy in charge thinks that by selling these two good  Companies he can get enough Cash to restructure the Ford Company, what he really needs is for the Profits from these Companies to carry the rest of Ford while the problems with the Product are sorted out.That will take Brains and bloody hard work qualities Barrow Boys in general do not have.

One last comment I would like to make is regarding the Cattle Slaughter problem.A few years ago I believe there was a scheme being tried by ADAS or DEFRA or MAAF[Govt body] trialing a Mobile Slaughter House what happened to it or the results I know not but has anything smilar been Trialed in the US.

I suppose I am a member of the Grumy old men brigade now!!!

The news of the loss of 1500 jobs continues to ripple through the area.  We know now that 2 people at least in our own community have lost their jobs.  Seems to have split people into three camps, those who think this is really bad and is going to practically ruin the area economy, those who don't care, or think it won't matter, and those who think it will make the area better because it will get rid of the minorities in the area. Tyson brought in about 400 Somalis to work in the plant last year, and their presence has caused alot of "angst" in the community.  I have never had any encounters with a Somali, so I have no real opinion.  I am in the first camp by the way, Emporia has a population of 25000, the 4 county area as a whole maybe has 50000, losing 1500 jobs is going to wreck things for a while.  The biodiesel plant being constructed has been put on hold because of the high soybean prices,so that is another reason for concern.

For years we have seen on the TV news towns where massive layoffs have impacted the community, I think we didn't take it seriously, as nothing like that had ever happened here, and in the back of our minds we didn't think it could.  Now, I am seeing firsthand how a massive surprise loss of jobs makes people act and react.  Just a glance at the Emporia Gazette website shows you some pretty wild comments, with a few intelligent ones every now and then.  The community leaders keep saying everything is going to be fine.  The Somalis, 750 total(workers and families), who were just moved here by Tyson about a year ago, announced today they will leave Emporia, resulting in a flurry of posts from some people saying they are glad they are leaving, and others declaring the entire area white population of being racist. Many of the workers who have lost their jobs here are going to be offered other jobs elsewhere.  So, while their lives are in upheaval, they are not going to be as bad off as many who are laid off in other industries.  It is the supporting industries, and the tax base of the area that is going to suffer the most.  Already it appears one feedlot will close in the area, at a cost of 15 more jobs.  Of course, the Somali cafe is closing as well.  My wife has lost 3 of the students she works with as a speech therapist already, and we are certainly concerned about her job, although we feel it probably is safe.  Intersperse all of this with the Fed cutting interest again today, and talk of a rebate for taxpayers and non taxpayers alike, with constant insistance by George Bush that our economy is strong, and it all seems somewhat surreal, it is like being in the storm cellar waiting for a tornado, you don't want it to hit anyone, but if it does touch down, you hope it hits the neighbors farm and not yours. 

PETA has now weighed in on the Tyson plant closing, not surprisingly they are elated.  If you want to read the story in the Emporia Gazette go to www.emporiagazette.com  .  Interesting factoid about the Gazette I recalled a bit ago, the founder or at least most famous owner was William Allen White.  His son William L. White was a correspondent in England during WW2 and covered the London blitz.  William L. adopted a war orphan from Britain, Barbara, her son is now the head sled at the Gazette, another UK connection for us.