Tyson closes major beef plants and cuts 2,500 jobs over cattle shortage
It's a flurry of bad news for Tyson Foods. The meat giant has announced that it is closing or will sell three beef plants, laying off at least 2,500 people, due to a cattle shortage.
High costs and cattle shortages to blame
Tyson Foods continues to struggle with higher costs and a cattle shortage, which has upended its business. The solution seems to be downsizing its manufacturing footprint, which is bad news for employees and consumers.
The plants that are ending operations are a case-ready plant in Eagle Mountain, UT, and its beef plant in Joslin, IL. The company is also considering selling its plant in Pasco, WA.
The plan is to shift those operations to other plants in the country, consolidating operations.
A massive operating loss has hit profits
The company's beef segment has announced an operating loss of a staggering $138 million. The losses are high enough that previous downsizing moves haven't gone deep enough, according to executives.
According to the USDA, cattle herds are at the lowest numbers in decades. Ranchers are expressing concern and hesitation to rebuild due to tough economies and the impact of climate challenges.
Add to that the resurgence of New World screwworm, and ranchers are even more hesitant.
The job losses could be much higher
As of right now, the exact number of layoffs is yet to be seen. The Joslin, IL closure accounts for 2,500 job losses alone. The Eagle Mountain, UT factory is said to employ between 800 and 1,200 people.
It's a hit to each of those communities and the workers.
Tyson is saying these consolidation efforts will help it create a more streamlined network while maintaining a similar level of cattle harvesting.
No end in sight for the beef woes
If beef is a staple on your grocery list, expect higher prices and tighter supply for the foreseeable future.
Source: Food Dive
