American agribusiness company Cargill has announced that it will idle its beef processing facility in Plainview, Texas, on 1 February 2013, and lay off 2000 workers. The company has blamed reduced cattle supply resulting from years of drought for this decision.
The move to idle Plainview facility includes measures for preserving its infrastructure for potential reopening if the US cattle herd rebounds and requires additional processing capacity. However, Cargill does not expect the US cattle herd to significantly increase in size for a number of years.
Cargill Beef president John Keating said that the decision to idle the Plainview beef processing plant was a difficult one to make and was made only after conducting an exhaustive analysis of the regional cattle supply and processing capacity situation in North America.
"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," Keating added.
The cattle that were previously destined for processing at Plainview will be supplied to the company's remaining beef cattle processing plants in the region, at Friona, Texas; Dodge City, Kansas. and Fort Morgan, Colorado.
Cargill's regional beef facilities at Fresno, California; Milwaukee, Wisconsin; Wyalusing, Pennsylvania, and Schuyler, Nebraska, and two beef plants in Canada, are unaffected.
The company noted that the employees at the Plainview facility employees affected by this decision will be provided support as well as assistance finding and filling open positions at other Cargill locations or with other employers.
