JBS in Union Talks at Colorado Beef Plant Amid Strike Threat

JBS SA, the world’s largest beef producer, said it’s in talks with a union to establish a new labor contract at its Greeley plant in Colorado as the threat of a strike looms.

JBS agreed to a one-month extension to a previous contract earlier in October for workers at the beef plant, the Sao Paulo-based company said today in an e-mail. The contract can be extended again on a day-by-day basis while negotiations with the union continue, Cameron Bruett, a spokesman for JBS, said in the e-mail today.

The 3,000 workers at the plant are preparing to strike as the two parties negotiate issues including increases to health care costs for employees and coverage for spouses, according to a statement on the United Food and Commercial Workers Union Local 7 website. The earliest the union could call a strike is Oct. 24, Kim Cordova, president of Local 7 and the chief negotiator, said in a telephone interview.

The company’s proposed pay increase would not offset the higher costs of health care for employees, who work in “dangerous condition” and operate heavy equipment, Cordova said.

A walkout would be bearish for prices, Rich Nelson, chief strategist at Allendale Inc. in McHenry, Illinois, said in a telephone interview. The facility is one of the “few mega-plants in the U.S.,” he said.

The Greeley beef plant slaughters and processes 5,200 head of cattle a day, according to the company.

Traders will want to prepare for the possibility of strike action because it “could turn out to be a big deal,” Lane Broadbent, vice president of KIS Futures Inc. in Oklahoma City, said in a telephone interview.

Cattle futures for December delivery fell 1.1 percent to settle at $1.31775 a pound at 1 p.m. on the Chicago Mercantile Exchange, after reaching $1.34, the highest for a most-active contract since Jan. 16.

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