Cattle futures have been on a historic multi-year bull run, with no amount of price hikes in beef or negative packer margins seemingly able to outweigh historically tight cattle supplies. A development that could throw a wrench in the rally is the potential closure of the JBS processing plant in Greeley, Colorado.
The plant is one of the largest in the country, processing an estimated 5,000 to 6,000 head per day according to the Colorado Times Recorder. The most recent USDA-NASS slaughter report shows 2.33 million head of cattle were slaughtered in federally inspected facilities in January, an average of 75,258 head per day. Assuming Greeley operates at the high end of the estimated capacity, the strike would result in a roughly 8% decrease in the daily kill rate at the national level.
If a strike does occur, and in turn lower processing capacity in the U.S. does take hold, both cash negotiations and live cattle futures are likely to see immediate pressure, with feeders following closely behind. For comparison, the announcement of Tyson winding down operations at their Lexington, Nebraska plant which processed approximately 5,000 head per day also resulted in a brief sell-off in the futures market. The nearby live cattle contract fell $7.25 the next trading day following the announcement, with feeders notching a $9.25 decline.
Lower beef production would also translate to a further increase boxed beef prices, which are already up 10.7% from the start of 2026, once again calling in to question what price consumers are willing to bear at the meat counter.
United Food and Commercial Works 7, the local union representing plant employees, held a vote on February 4 where 99% of union workers at the plant approved a potential strike, accusing the packer of engaging in bad-faith negotiations. Earlier this week, the union gave the required 7-day notice that they are canceling the current contract, which had been extended from its original end date in July of 2025. This means that a legal strike could occur as soon as Monday, March 16, just ahead of markets opening for the week.
UFCW 7 President Kim Cordova said JBS has participated in unfair labor practices and not negotiated fairly on a new contract over the past eight months, according to Reuters. Workers sought wages that keep pace with inflation and wanted the company to stop charging them for replacing protective equipment they wear to do their jobs safely, she said.
JBS said it complies with labor laws, sought to reach a fair agreement, and charges employees for protective equipment that is lost or maliciously damaged, Reuters reported.