Cargill Closing Wisconsin Beef Processing Facility

Reuters’ Karl Plume reported that “U.S. agribusiness Cargill will permanently close its beef processing facility in Milwaukee, Wisconsin, and eliminate 221 jobs, according to a filing with the state, the latest U.S. beef plant to be shuttered amid rising costs for meatpackers.”

“The Cargill Meat Solutions facility will stop production around mid-April and fully close around the end of May, a notice filed by Cargill with the Wisconsin Department of Workforce Development said,” Plume reported. “The plant specializes in fresh beef, ground beef, and value-added products but does not slaughter cattle.”

“Cargill said the move was made ‘to better align our portfolio with current customer demand and prioritize investments,’ adding that ground beef production will shift to its other North American facilities with no impact on its consumer contracts,” Plume reported. “The company operates seven other facilities in the state and some of the employees affected are expected to move to one in nearby Butler, Wisconsin.”

Bloomberg’s Michael Hirtzer and Ilena Peng reported that “the move comes as the US cattle herd has dropped to the lowest in 75 years, leaving meatpackers with fewer animals to keep plants running. Other companies have announced closures: Rival beef producer Tyson Foods Inc. earlier this year shut a cattle slaughtering plant in Nebraska and reduced operations at a Texas facility, while JBS NV said it would close a meat-processing plant in California.”

“An industry turnaround isn’t expected soon, as there are few signs of a much-anticipated rebuilding of US herds,” Hirtzer and Peng reported. “The situation has been exacerbated by an ongoing halt to shipments of live cattle from Mexico, where the deadly New World screwworm has infected animals. Prices for steers jumped about 20% from 2024 to 2025, with a further increase projected for this year, according to the US Department of Agriculture.”

“The supply tightness, while hitting meatpacker margins, has also sent consumer beef prices soaring to a record high. That’s presented challenges to President Donald Trump’s campaign promise to make groceries more affordable. He has sought to boost beef imports, including a directive last week to increase shipments from Argentina,” Hirtzer and Peng reported. “The Trump administration last year blamed the industry for soaring prices, ordering an investigation of companies, yet beef packers are losing money on each animal, according to data from HedgersEdge.”

Facility to Stop Operations by Mid-April

The Milwaukee Journal Sentinel’s Ricardo Torres reported that “the facility, located in the Menomonee Valley at 200 S. Emmber Lane, is to start winding down operations soon, with production stopping around April 17.”

“The facility, which Cargill says produces ‘fresh beef, ground beef, and value-added meat products for some of the largest grocery retailers in the U.S.,’ is to be fully closed around May 31,” Torres reported. “Cargill said it plans to lay off workers in phases ‘based on customer and operational needs,’ the notice said. The first workers are to be laid off around April 11.”

“Over the last 12 years Cargill has been reducing its footprint in Wisconsin,” Torres reported. “In 2014, Cargill closed another Menomonee Valley facility on Canal Street, laying off 600 workers. And in 2021, the company closed another Milwaukee facility on 12500 W. Carmen Avenue, laying off about 80 workers.”

Meatpacker Margins Remain Low

Drovers’ John Nalivka reported that “both packer and feedlot margins declined last week to -$273/head for packers as Choice steer prices gained against little gain with the Comprehensive Cutout Value ($360.50/cwt.) and higher break-evens in the feedlot. Sterling’s estimate for feedlot margins last week were $307/head against $342/head the previous week.”