UPDATE 1-Tyson to use private data to price hogs during U.S. shutdown
By Alyce Hinton
CHICAGO Oct 4 (Reuters) - Top U.S. meat packer Tyson Foods Inc told hog producers that it had developed an alternative formula to determine the price it pays for hogs since U.S. Department of Agriculture's market prices have been suspended due to the government shutdown on Oct. 1.
Tyson, which uses data from the USDA's Agricultural Marketing Service to determine the cash value for hogs, said in a letter late Thursday that it would now use price data from Urner Barry - a U.S. analytical research firm closely followed by livestock packers and traders for its meat prices and data - until USDA-AMS price data is available.
"This method will be used beginning with market hog deliveries on Monday, Oct. 7," Tyson said in its letter to hog suppliers.
Once the USDA begins providing the necessary market reports to determine prices, Tyson will revert back to its original pricing formula, it added.
U.S. livestock markets are reeling from this week's disruption of USDA data as packers, producers and traders count on daily slaughter, wholesale pork and beef prices to calculate livestock prices. Those market reports were pulled along with thousands of others that the agricultural industry counts on to price commodities.
Top pork producer Smithfield told hog producers earlier this week that it was adjusting how it was pricing hogs until the federal government reopened. On Wednesday, U.S. futures operator CME Group Inc suspended its lean hog and feeder cattle price indexes, both of which are based on USDA price data to determine final livestock settlement values.