National Beef says falling cattle herd forcing closing of Brawley plant
By Daniel Enoch
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, Feb. 26, 2014 - National Beef Packing Co. says it is going ahead with plans to close its Brawley, Calif., processing plant despite an offer by local cattle-feeding operations of $24 million in cattle price discounts for 2014 and 2015.
National Beef, the country's fourth-largest beef processor, said in a statement that it had reviewed the incentive offer, which it described as “thoughtful and well-organized.” Still, the last day of production at the plant is expected to be April 4, it said.
“Unfortunately, the barriers to profitably operate the facility continue to exist,'' the company said. “Even with the proposed incentive package, the declining supply of fed cattle available for the Brawley facility remains the key driver of our decision to close the plant.”
National Beef and other meat companies have been trying to cope with excess capacity at their slaughterhouses as the nation's cattle herd declines. As of Jan. 1, the total inventory of cattle and calves in the U.S. had dropped to 87.7 million, the lowest since 1951, USDA said in a report last month.
The shutdown of the Brawley plant, which employs about 1,300 people, will be a severe blow to the city, which has a population of about 25,000. National Beef CEO Tim Klein said the company will be offering job-hunting assistance to displaced workers in the community, situated in the California desert about 120 miles east of San Diego and 70 miles west of Yuma, Ariz.
In an effort to keep the plant open, the local feeders, represented by the Imperial Valley Cattle Feeders Group, last week upped their incentive proposal, offering $9 million in cattle price discounts to National Beef for the next two years, on top of an earlier offer of $15 million in discounts.
“Valley feeders understand National's need for more cattle and are ready to accommodate those needs to the best of their abilities,” said Bill Brandenberg, with the Feeders Group, in announcing the offer.
For more information, go to www.agri-pulse.com.