Cargill on Friday shut down its Milwaukee beef harvest facility, which had 600 employees.
Employees were informed last week, said Mike Martin, a company spokesperson. All of the impacted employees will be given 60 days pay under WARN regulations.
The affected employees will be offered positions at facilities across the Midwest, which includes pork, beef and other processing plants in Wisconsin, Illinois, Nebraska and Iowa, Martin said. The company has not yet determined how many total positions will be offered to the affected employees.
“Wherever there are opportunities, they’ll be offered to employees,” he said.
Cargill’s 10-building Milwaukee complex is on a 29-acre lot in the Menomonee Valley. The fabrication and harvest and cooler portions, which comprise about 75,000 square feet, will be shut down, Martin said. Some of the complex’s buildings are already vacant.
Cargill said it needs to shut down the beef harvest facility there because of the tight cattle supply brought about by producers retaining cattle for herd expansion.
High feed costs and the drought resulted in liquidity that depleted the herd, but as feed costs have risen and drought conditions have improved, it has become more profitable for cattle producers to retain animals, have calves and expand their herds, which has resulted in a lower supply for processors like Cargill, Martin said.
“It’s basically overcapacity for processing in certain regions of the U.S. and not enough cattle,” he said.
“Closing our Milwaukee beef plant is taking place only after we conducted an 18-month-long analysis of the region’s cattle supply and examined all other possible options,” said John Keating, president of Cargill Beef, based in Wichita, Kan. “It is unfortunate that we must close any beef plant because of the impact to good people, their families and the community. The harsh reality is that the U.S. beef cattle herd is at its lowest level since 1951, with any significant herd expansion being years away.”
As of July 1, the U.S. cattle inventory was at its lowest since July 1, 1973, when the series records began. The United States Department of Agriculture report indicated there are 95 million head of cattle, down 2.9 percent from July 2012 (results weren’t release in July 2013 because of a government shutdown). The low numbers may be partially caused by a lingering drought in Oklahoma, Texas and Kansas. Cattle futures continue to rise, which could drive beef costs higher.
However, the ground beef plant at the Milwaukee site will remain open. That facility has about 200 employees.
Cargill’s six other U.S. beef harvest plants are unaffected, the company said. The company’s six remaining U.S. beef processing plants are located in California, Texas, Kansas, Colorado, Nebraska and Pennsylvania.
