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UPDATE 1-USDA to probe beef, cattle prices after Tyson Foods slaughterhouse fire

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CHICAGO, Aug 28 (Reuters) - U.S. Agriculture Secretary Sonny Perdue ordered an investigation on Wednesday into widening margins between the prices of cattle and beef after a fire at a Tyson Foods Inc slaughterhouse in Holcomb, Kansas, shut the plant.

Cattle prices have tanked because the fire temporarily eliminated a key buyer of livestock. Farmers have worried that meat packers such as Tyson, Cargill Inc and JBS USA would take advantage of the situation by dropping their offering prices.

At the same time, beef prices have climbed as buyers for restaurants, food service companies and grocery chains are scrambling for meat.

Profit margins for the packers are above $400 per head of cattle slaughtered, up from around $150 before the fire and well above the previous record of $308, according to Denver-based livestock marketing advisory service HedgersEdge.com.

The USDA will investigate whether there is evidence of price manipulation, collusion or other unfair practices, according to a statement.

"If any unfair practices are detected, we will take quick enforcement action," Perdue said.

Tyson had no immediate comment. Cargill and JBS did not immediately respond to requests for comment.

The investigation "demonstrates the government's understanding of the extreme strain placed on the cattle industry by the plant fire," said Jennifer Houston, president of the industry group National Cattlemens Beef Association. (Reporting by Tom Polansek Editing by Chizu Nomiyama and Sonya Hepinstall)