Hitch Enterprises, a privately held livestock operation, has reached a deal whereby it will sell cattle from its three feedyards solely to National Beef Packing Co. LLC, an agreement that Hitch leaders believe will produce better prices for its customers.
The “handshake” agreement started in January and will continue indefinitely, Hitch chairman Jason Hitch told Reuters in an interview.
The marketing agreement is similar to those used at other large cattle-feeding operations. Hitch operates three feedyards, two in Oklahoma and one in Kansas, for a total onetime capacity of about 160,000 head.
Hitch ranks among the top 15 largest U. S. cattle-feeding operations, according to the Livestock Marketing Information Center.
Cattle-marketing arrangements with beef companies have drawn criticism because they reduce the number of cattle traded in the open market, thereby lessening the bargaining power of feedlots to negotiate prices.
“I am just trying to keep my business alive,” Hitch said. “I would love to see things more competitive, but I don’t think that is going to happen.”
In 2000, a beef plant in Garden City, Kansas, burned down, and more recently Tyson Foods Inc. suspended cattle slaughter at its Emporia, Kansas, plant.