Cargill Inc. is selling its two remaining cattle feedlots in Kansas and Colorado, marking the company's complete exit from this aspect of the beef industry.
Cargill is selling two cattle feedlots, exiting that portion of the beef industry
Cargill's $36.7M deal will complete its exit from this area of beef production
April 27, 2017 at 3:17AM
The Wayzata-based agribusiness giant is still a major player in beef production with multiple beef processing plants across the southern, central and western U.S. Cargill hopes to finalize the sale of its Leoti, Kan., and Yuma, Colo., feed yards to Omaha-based Green Plains Inc. after regulatory approval. Green Plains is purchasing the yards for $36.7 million, excluding working capital.
In July, Cargill sold its feed yards in Bovina and Dalhart, Texas, to Amarillo-based Friona Industries LP.
Just like in Texas, the buyer of the Colorado and Kansas feed yards will continue to supply Cargill's nearby beef processing plants once the cattle are ready for slaughter, under a multiyear agreement.
Both the Colorado and Kansas feedlots have a capacity of about 155,000 cattle at any given time. Green Plains, through its Green Plains Cattle Co. subsidiary, will offer jobs at both locations to affected Cargill employees, which number about 90.
"Selling our two remaining feed yards aligns with our protein growth focus by allowing us to redeploy working capital away from cattle feeding operations to other investments," said John Keating, president of Cargill's Wichita, Kan.-based protein business operations and supply chain. "By partnering with Green Plains in a multiyear supply agreement, the Yuma and Leoti yards will continue to supply cattle to our beef processing facilities at Fort Morgan, Colo., and Dodge City, Kan., ensuring consistent high-quality beef products for our customers."
Cargill has invested about $560 million in acquisitions and capital investments in the past two years to grow various aspects of its North American protein business while shedding portions with low margins. Two years ago, Cargill sold its entire pork business to JBS USA Pork for $1.45 billion, a deal that combined two of the country's largest pork processors.
Last year, the company bought Five Star Custom Foods, a Fort Worth, Texas-based producer of specialty cooked meats that are sold to restaurants or used by food makers as pizza toppings, soup ingredients and more. It also opened a new beef distribution center in Dodge City, Kan. In 2015, Cargill converted a beef processing plant in Columbus, Neb.
Cargill remains one of the nation's four largest beef producers that collectively control more than 70 percent of the U.S. beef market.
Kristen Leigh Painter • 612-673-4767
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