Cargill Inc., the largest U.S. beef processor, will idle a Texas processing plant, citing the decline in the nation’s cattle herd.
The Plainview plant will stop operations at the close of business on Feb. 1 to reduce the strain on the company’s beef business, John Keating, president of Cargill Beef, said Thursday in a statement. The plant employs 2,000 people and those affected by the closing will get help finding jobs elsewhere, Minneapolis-based Cargill said in the statement.
“Given the overcapacity 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 Dodge City, Kan., more consistently on a five-day-per-week basis,” Keating said.
The U.S. beef-packing industry has 10 percent to 15 percent excess capacity, with the highest level in the southern plains where Plainview is located, said David Nelson, an agricultural global strategist for Rabobank International in Chicago. Herd liquidation intensified in that region because of drought in 2011 and 2012, he said in a telephone interview Thursday.
Cargill’s remaining beef-processing plants in Texas, Kansas and Colorado will receive cattle destined for Plainview, according to the statement. Cargill beef facilities in California, Wisconsin, Pennsylvania and Nebraska and two plants in Canada are unaffected.
Cargill doesn’t plan to sell the Planview plant, Mike Martin, a spokesman for the closely held company, said in a telephone interview today. He declined to comment on how long the plant will be idled.
“We don’t think there will be a reversal in the national cattle herd for a number of years,” he said.