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Agriculture Today


Cargill to idle Plainview beef plant




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January 23, 2013 | 4,161 views | Post a comment

PLAINVIEW -- Cargill announced Jan. 17 that it will idle its Plainview, Texas, beef processing facility effective at the close of business Friday, Feb. 1, resulting primarily from the tight cattle supply brought about by years of drought in Texas and Southern Plains states. According to a Jan. 17 Cargill press release, approximately 2,000 people work at the Plainview facility, and they will receive company support.

“The decision to idle our Plainview beef processing plant was a difficult and painful one to make and was made only after we conducted an exhaustive analysis of the regional cattle supply and processing capacity situation in North America,” said John Keating, president of Cargill Beef, based in Wichita, Kan. “... The U.S. cattle herd is at its lowest level since 1952. Increased feed costs resulting from the prolonged drought, combined with herd liquidations by cattle ranchers, are severely and adversely contributing to the challenging business conditions we face as an industry. Our preference would have been not to idle a plant.”

The company’s remaining beef cattle processing plants in the region, at Friona, Texas; Dodge City, Kan.; and Fort Morgan, Colo., will receive cattle that were previously destined for processing at Plainview. The company’s regional beef facilities at Fresno, Calif.; Milwaukee, Wis.; and Wyalusing, Pa., as well as its beef plant in Schuyler, Neb., and two beef plants in Canada, are unaffected.

“Given the over-capacity that exists with four major beef plants in the Texas Panhandle and a dwindling supply of cattle in the region, idling Plainview will allow Cargill to operate its other beef plants in Texas, Colorado, and Kansas more consistently on a five-day-per-week basis to meet our customers’ requirements, while helping us maintain our position in the U.S. beef sector,” explained Keating. “... Over the past 10 years we’ve invested more than $766 million in our U.S. beef plants to ensure they remain best in class in the industry.”

The plan to idle Cargill’s Plainview facility includes measures for preserving its infrastructure for potential reopening if the U.S. cattle herd rebounds and requires additional processing capacity. However, Cargill does not expect the U.S. cattle herd to significantly increase in size for a number of years.

In response to the news of Cargill idling its Plainview plant, Texas Agriculture Commissioner Todd Staples released the following statement Jan. 17:

“The news of Cargill’s plans to idle its Plainview plant next month is a devastating blow to this Texas Panhandle community and the economic health of Texas. As the largest employer in Hale County, the Cargill plant supports 2,000 jobs that will be lost effective Feb. 1.

“Cargill and its Plainview employees are the latest in a long line of victims claimed by our historic 2011 drought. As cattle herds diminish, so too, do jobs and the livelihoods of our fellow Texans.

“I am told by company officials that Cargill has no current plans to sell the facility, and I have directed Texas Department of Agriculture staff to work with the company and community leaders toward an expeditious resumption of business.”
 

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