Cargill says it does not plan to close US beef processing plants

Audio By Carbonatix

Enlarge

By Tom Polansek

CHICAGO (Reuters) -Cargill Inc has no immediate plans to close its U.S. beef processing plants, the company said on Wednesday, days after meatpacker Tyson Foods announced it would shutter a major Nebraska facility as the industry grapples with tight cattle supplies.

Beef processors have been pressured as ranchers have slashed the U.S. cattle herd to its lowest level in decades following a years-long drought that burned up pasture lands and hiked feeding costs. A halt on U.S. imports of Mexican cattle tightened supplies further this year, as Washington seeks to keep out a flesh-eating parasite.

Tight inventories have raised costs for meatpackers, which must pay more to buy cattle, and pushed beef prices to record highs. U.S. President Donald Trump said last month he was working to bring down beef prices.

“We don’t have intention to close any primary beef processing plants right now,” Cargill said in an email to Reuters. “In fact we are investing in them.”

Cargill, a major ground beef producer, has eight primary beef plants in North America that slaughter cattle, according to the company.

On Friday, Tyson Foods said it would close a beef plant in Lexington, Nebraska, and convert its Amarillo, Texas, beef facility to a single, full-capacity shift.

Cargill and Tyson, along with JBS USA and National Beef Packing Company, slaughter about 85% of grain-fattened U.S. cattle carved into steaks, ribs and roasts for consumers.

Cargill said in June it would invest about $90 million in its Fort Morgan, Colorado, beef plant to improve automation and increase yields.

(Reporting by Tom Polansek; Editing by Richard Chang)