A number of converging elements are placing the squeeze on the cattle value chain and business dynamics, and the current cyber attack on JBS has added one other layer of disruption to an already harassed system.
JBS introduced the hacking, presumably Russian in origin, earlier this week. The cyber attack meant the firm ceased slaughter in a number of crops, together with the Brooks, Alta., facility.
The cattle business is already beneath important strain at the packer degree, and any disruption in any respect provides to the pressure on the system as processing services attempt to get present.
To debate how this latest stress impacts coverage discussions surrounding packer earnings, cattle pricing, and consolidation, RealAg Radio host Shaun Haney is joined by Drovers’ editor, Greg Henderson.
Henderson says that this latest occasion is the third “black swan” occasion since late 2019 for the cattle business. First, there was the plant hearth in Kansas, then the pandemic struck, and now this.
After every occasion, there was a crash in futures, and strain on reside cattle costs, and now with feed costs going increased, 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 simply on costs but additionally on processing capability, and that has many speaking about increasing capability and attainable legislative motion so as to add transparency and competitiveness again into the market.
Associated: Packer earnings proceed to boost eyebrows