– Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee
A couple of questions came in this week concerning Walmart opening a beef packing facility and how the new facility would influence cattle prices. The short answer is that the opening of this facility is not likely to change cattle prices much at all. The reason prices are not expected to change much is because it does not really change supply and demand of beef.
Walmart is partnering with a single seedstock operation, a specific feedlot, and a specific slaughter facility at which time the Walmart facility will take delivery and perform further processing and packaging for the Walmart brand. Thus, the processing facility will create competition with other processing facilities and at the retail level. However, it is not likely that this will shift demand or supply enough to really influence cattle prices at the calf and yearling stages of production.
The people this will impact are those producers who are using the seedstock producer’s genetics and providing cattle to the program.