011208 IBP Cuts Beef Production at Four Plants

Chicago - Production was suspended at two IBP Inc. beef plants and was reduced at two other company beef plants because of market conditions, the company said.

All four plants should resume normal operations on Tuesday.

IBP is a unit of U.S. chicken giant Tyson Foods Inc. Beef plants at Emporia, Kansas, and Lexington, Nebraska, were closed on Monday and the plants at Amarillo, Texas, and Finney County, Kansas, operated at reduced hours, the company said.

The drop in production became evident Monday afternoon when USDA estimated Monday's cattle slaughter at 109,000 head. That was down from 120,000 head a week ago. Analysts had expected Monday's slaughter to be 120,000 to 126,000 head.

Profit margins at beef plants narrowed late last week in reaction to lower cash beef prices. Late on Friday, HedgersEdge.com LLC estimated average beef plant margins at $1.90 per head of cattle, which was down from $25.10.

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