Tyson Foods, Inc. said that their subsidiary, Tyson Fresh Meats, will be ceasing its operations, effective immediately, at its plant in Denison, Iowa, to reduce its beef production capacity, according to a press release issued by Tyson Foods.
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“The cattle supply is tight, and there’s an excess of beef production capacity in the region”.
Tyson said their rendering system at the Denison plant will remain open.
“It affects the lives of our people, their families, this great community that supported us for so many decades…however, the realty of the beef business is it has changed and we have to continue to change with it to remain successful”.
The company is offering financial incentives to former hourly employees of the Iowa plant who qualify for openings at a beef plant in Lexington, Nebraska – about 280 miles away from Denison.
The Denison plant opened in 1961 as the first plane operated by Iowa Beef Packers, a start-up company that grew to become one of the world’s leading beef processors. “We believe the move to cease beef operations at Denison will put the rest of our beef business in a better position for future success”.
Tyson’s Denison plant has a daily estimated slaughter capacity of about 2,000 head of cattle over a five-day work week, which represent 2 percent of U.S. steer and heifer slaughter capacity, according to industry experts.
Workers who lost their jobs will get 60 days pay, even if they’re not on the job.
He said the effects of the drought are more noticeable in beef because cattle herds take longer to regrow than a chicken or pig farm. In its last fiscal year, Tyson’s beef business processed fewer cattle than it had the year before, and it was the only Tyson Foods division that didn’t report an increase in sales volume. The company will invite state workforce officials to the plant so they can tell affected workers what type of unemployment benefits and retraining opportunities are available. “The beef market conditions contributed to disappointing third-quarter earnings for Tyson, which scaled back its forecast for full-year earnings growth”.
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Travis Justice, executive director of the Arkansas Beef Council, said he expects the number of cattle to rebound in the next year.
