Cargill Quits the Cattle Feeding Business


The high-risk business of feeding cattle is not for everybody.  Now Cargill has decided it is not for them, announcing that they will sell their last two feedyards.


Industry leaders familiar with Cargill say they are not surprised, and that it has become more evident in recent months that Cargill did not have the appetite for the level of risk involved in feeding cattle.  Even a large company like Cargill may have found this segment of the beef industry to be a financial challenge.


Founded in 1865, Cargill, Inc. is the largest privately held corporation in the United States in terms of revenue.  Still 90{43a21437b022293ea22983a65937d7e18883fb2ff2b11e03a1041d36bd400603} owned by one family, Cargill declared revenues of $107.2 billion last year.


Cargill sold their two Texas feedlots to Friona Industries last summer, and now their last two yards in Colorado and Kansas, with a combined capacity of 155,000 head, have been sold to Green Plains, Inc., a diversified commodity processing business based in Omaha, Nebraska, with at least 17 Ethanol Plants in multiple states.  Green Plains already owns feedyards in both Kansas and Texas. 



Cargill says it is a strategic move for them, “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-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, Colorado, and Dodge City, Kansas, ensuring consistent high-quality beef products for our customers.”


Cargill has over two dozen meat and poultry processing locations in the U.S. and Canada.  According to an article Drovers Journal, the moves helped free up money for approximately $560 million in acquisitions and capital investments by Cargill’s North American protein division during the past two years.


According to Reuters, “Their withdrawal from the feeding business highlights a change in priorities at the company, which says it is the world’s largest supplier of ground beef. Cargill is seeking to expand its North America-based protein business by exploring plant-based protein, fish and insects, along with other opportunities linked to livestock and poultry. The Green Plains Cattle Company, a subsidiary of the ethanol producer Green Plains Inc, will supply cattle to Cargill for processing through a multi-year agreement, according to the companies. By buying the feed yards, Green Plains gains markets for its distiller’s dried grains, an ethanol byproduct used to feed livestock.”




Sources:   Northern Ag Network, Reuters, Drovers Journal



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