Audio courtesy Gary Crawford with USDA.
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At the close of business February 1, Cargill will idle its beef processing facility in Plainview, Texas. The company cites the tight cattle supply brought about by years of drought in Texas and Southern Plains states as the primary reason for the decision.
The Plainview facility employs approximately two-thousand people. They will receive company support. Cargill Beef President John Keating said the difficult and painful decision followed an exhaustive analysis of the regional cattle supply and processing capacity situation in North America. He noted the U.S. cattle supply is at its lowest level since 1952. Keating added that 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 the industry faces.
As USDA livestock analyst Shayle Shagam explains, the problems facing the cattle industry now have been years in the making.
Keating said the decision to idle Plainview was delayed as long as possible. He said there was hope the drought would break, pasturelands would be restored, cattle ranchers would retain heifers and the national herd trend of declining numbers would be reversed. Even though that hasn?t happened – he said Cargill is optimistic about the long-term prospects for U.S. beef demand from American and international consumers.
According to Keating, idling the Plainview facility will allow Cargill to operate its other beef plants in Texas, Colorado and Kansas more consistently and help the company maintain its position in the U.S. beef sector. While Cargill doesn?t expect the U.S. cattle herd to significantly increase in size for a number of years, they will preserve the infrastructure at Plainview for reopening if the cattle herd rebounds and requires additional processing capacity.
