Drought Returns as Industry Reflects on Packing-Plant Closure

PLAINVIEW, TX – With the background of a multi-year historic drought across Texas, a declining beef herd, and negative returns for meatpackers, Cargill announced the closing of a packing plant on the South Plains.

“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 Kansas” explained John Keating, president of Cargill Beef 9 years ago this week.

At the time, the U.S. cattle herd was at its lowest level since 1952 and Keating said “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”.

Today, the plant serves as a parking lot for tractor-trailers from a nearby Walmart Distribution Center and is no longer available to return to its previous use.

Ironically, drought is setting back into the region, the nation’s cattle herd is liquidating, and feed costs are increasing. The main difference between 2013 and today is the record-breaking profits the four major meatpackers are making, in part, due to the tightening of the processing capacity a decade ago.
(SOURCE: All Ag News)