Several converging factors are putting the squeeze on the cattle value chain and industry dynamics, and the recent cyber attack on JBS has added another layer of disruption to an already stressed system.
JBS announced the hacking, possibly Russian in origin, earlier this week. The cyber attack meant the company ceased slaughter in several plants, including the Brooks, Alta., facility.
The cattle industry is already under significant pressure at the packer level, and any disruption at all adds to the strain on the system as processing facilities try to get current.
To discuss how this latest stress impacts policy discussions surrounding packer profits, cattle pricing, and consolidation, RealAg Radio host Shaun Haney is joined by Drovers’ editor Greg Henderson.
Henderson says that this latest event is the third “black swan” event since late 2019 for the cattle industry. First, there was the plant fire in Kansas, then the pandemic, and now this.
After each event, there was a crash in futures, and pressure on live cattle prices, and now with feed prices going higher, ranchers and feedlot operators are left in turmoil.
“Too many producers are on the verge of financial ruin,” Henderson says. The packers have a stranglehold, not just on prices but also on processing capacity, and that has many talking about expanding capacity and possible legislative action to add transparency and competitiveness back into the market.