An August fire at a Tyson Foods beef production facility outside Holcomb, Kansas, halted production, but workers will keep their full-time pay until the damage is repaired.
Fears of economic hardship in the beef industry grew when a Tyson Foods Inc. processing plant just outside of Holcomb, Kansas, burst into flames on the evening of Aug. 9.
The plant processes more than 5,000 cattle a day, and the fire, while not widespread, burned a critical location of the facility, shutting down production. Tyson officials expect to have the plant repaired and online by the end of the year.
The effect on the national beef market was was worrisome. The Finney County plant processed about 5% of the country’s beef, and the price for feeder beef fell from $1.05 a pound to $1 after the fire.
Beef prices have rebounded to nearly $1.10 a pound, said John Navilka, owner of Sterling Marketing Inc. of Vale, Oregon, and a longtime beef industry analyst.
“It took roughly 5% of the slaughter-fed cattle capacity out with that plant,” Navilka said. “We found out a week later we still got the cattle slaughtered and processed. People are often surprised how good meat packers, and companies in general, are at getting that done. In the meat business, you can hold cattle in a feedlot and they’re just going to get bigger. There is always a contingency plan, and they are always thinking ahead.”
Tyson officials declined comment, referring to blog posts on the company website attributed to Steve Stouffer, group president of Tyson Fresh Meats. Stouffer said Tyson increased production at its other facilities in the state and region and paid to have area cattle shipped to the operating plants.
“We recognize the disruption the fire has caused for cattle suppliers and have been working diligently to mitigate the impact,” Stouffer wrote.
Navilka said cattle supply has been strong, which put pressure on producers with pricing. The threat of having 5% of the production knocked offline, reducing the demand when supply was already high, worried the industry.
Navilka was more optimistic about the strength of the industry and the temporary effects of the Tyson fire.
“Of course I’m not sitting in a feedlot and I don’t have cattle on feed,” Navilka said. “It was definitely a glitch, but that happens in this industry. It is largely behind us. We are headed into quite a bit better market.”
The citizens of Finney County in western Kansas had understandable concerns when the fire alarms rang in the evening hours at the plant.
Back on Christmas Day 2000, a fire broke out at a Conagra plant 7 miles to the east of Holcomb in Garden City, the Finney County seat. The plant sustained heavy damage, never reopened and more than 2,000 workers lost their jobs.
Tyson is the largest employer in Finney County with about 3,800 employees, nearly 10% of the county’s population of 40,000. There are more employees at the plant than the population of Holcomb (2,200), as the workers come from across the county. Garden City, has a population 28,000.
Fire crews from local towns and the county battled the blaze for 12 hours before bringing it under control. The 1,200 employees working at the time were evacuated without injury, but hydraulic and electric systems serving the harvest floor were destroyed.
Tyson officials almost immediately put minds at ease, announcing that all full-time employees would be paid until the plant was repaired and reopened.
The company wouldn’t comment on the cause of the fire, but other sources said it apparently began during maintenance work on the floor above the processing floor.
Stouffer said some employees have relocated to other Tyson facilities that expanded production to cover for the loss of the Finney County site. Stouffer said some non-processing work at the Finney County facility has resumed.
“When you think about it in the aftereffects, you think, ‘Boy we really escaped some major economic issues for our community,’” said Holcomb Mayor Brian Rupp, whose next-door neighbor was one of the Tyson employees reassured of a regular paycheck during the down time. “It never got to the point where we thought we were going to be in a world of hurt.”
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When the flames licked the night sky shortly after 8:30 p.m., Lona DuVall was pessimistic. DuVall, the president of the Finney County Economic Development Corp., said the Conagra fire and shutdown was a harsh blow to the county, and no one wanted a repeat.
Rupp said Tyson officials let the community know within hours, even before the damage was assessed, that the company would take care of its employees and rebuild. DuVall said Tyson has held true, staying in regular contact with local and state officials about the situation.
“As a community we have been through a plant fire, unfortunately, in our past, so we have something to compare it to,” DuVall said. “We have been very pleased with Tyson’s response, with their handling of their employees and, quite frankly, their handling of communications. For a terrible experience it has been an absolute joy to work with them. They have been nothing but professional and forthcoming with us.”
The plant is just outside the city limits of Holcomb, made infamous by Truman Capote’s book “In Cold Blood,” about the 1959 murders of the Clutter family. The plant’s taxes support the county and the Holcomb school district. Keeping 3,800 employees on full-time, 40-hour weekly pay was vital for the area economy.
“This isn’t an isolated, one sector of our economy that is impacted,” DuVall said. “This impacts all of our growers, all of our truckers. It has the potential to really alter our economic strength we had experienced the last several years, so we were extremely concerned.
“People ask me all the time, ‘What does that mean to your economy?’ The heck with my economy. There is 5% of the beef production to the U.S. That tells you a lot about the significance of that plant.”
“We have been very pleased with Tyson’s response, with their handling of their employees and, quite frankly, their handling of communications. For a terrible experience it has been an absolute joy to work with them.”
LONA DuVALL
President, Finney County Economic Development Corp.
The fire could have been worse; the damage to the sprawling facility was small in scale but critical enough to shut down processing. DuVall said the fire burned vertically but didn’t spread far from the original spark.
“The rebuild is a much smaller task than it might have been otherwise,” DuVall said. “It happened at night, which didn’t help because everything looked bigger. The flames shooting up that high, that is what scared everybody to death, but is exactly what needed to happen.
“People were, ‘Oh my God, the plant is in rubble.’ Now, from the highway you can’t even tell there was an issue.”
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