Beef Plant Fires Rage, Grand Island JBS Cause Ruled Heater on Roof

The cattle industry welcomed the birth of a new black swan this mid-September. The flock grew as the JBS beef plant in Grand Island, NE caught fire near the rending side of the plant during the late hours of September 12, 2021. Fire crews battled the blaze into the following day. No injuries were reported, but the operating shifts for September 13th were canceled as the plant operations came to a halt. Days later, the Nebraska Fire Marshall ruled the cause of the fire a heater on the roof.

The damage sustained by the facility was deeded to be limited to the rendering area of the plant, and JBS stated they could continue operations by September 14th. The fire reminded us of the Tyson fire at Holcomb, Kansas, just over two years ago. The damage at the Tyson plant led to a sharp market reaction, causing fed cattle futures to drop sharply while boxed beef prices soared. The Grand Island plant also was among the JBS facilities that were idled in May for a short time when the company was hit by a cyber-attack.

Although the effects of this fire were limited, even the notion of the 5% U.S. capacity plant did negatively affect cattle markets for the short-term indicating a concern that the packers are too consolidated to remain sustainable. With the current level of consolidation of the beef packing industry, the slightest blip can ripple negatively throughout the entire supply chain.