US beef producer sells cattle farms to raise investment capital

Cargill's sale of the two cattle yards marks a final departure from cow-feeding operations

Cargill will sell its two remaining cattle feedlots to Omaha-based Green Plains, as the US meat producer exits the cattle feeding business.

Minnesota-based Cargill has struck a deal to sell its last two cattle feeding yards to ethanol producer Green Plains for $36.7m, after offloading similar cattle farms to Friona Industries in 2016.

The sale of the Colorado and Kansas cattle feed yards to Green Plains completes Cargill’s departure from cattle feed operations, highlighting its focus on meat processing.

In the past two years, the firm has announced more than $500m-worth of acquisitions and capital investment in its US meat enterprise, which includes beef and poultry processing.

All 90 jobs are safe

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 protein business operations and supply chain.

By partnering with Green Plains in a multiyear supply agreement, the Yuma [Colorado] and Leoti [Kansas] 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 said the 90 staff employed at the two feedlots would be offered jobs by Green Plains.

Subsidiary Green Plains Cattle Company will enter into a long-term deal to supply cattle to Cargill. At any one time, the two feed yards offloaded by Cargill can hold around 155,000 head of cows.

Through its acquisition Green Plains will become the fourth-largest cattle-feeding operator in the US, as the business already owns 70,000 head of cattle in Kansas and 30,000 cows in Hereford, Texas.

One of the inherent benefits of this transaction is the scale of internal demand for our co-products, produced at company-owned ethanol plants,” said Todd Becker, president and CEO of Green Plains.
 
Our cattle business will now consume more than 300,000 tonnes of dried distillers grains and 40 million pounds of corn oil annually.

The ability to effectively control our feed supply cost provides our cattle business with a strategic operating advantage, resulting in more predictable and stable cattle-feeding margins while enhancing Green Plains’ knowledge of ration dynamics.

Becker added that the meat industry has had a “favourable” impact on the firm’s earnings since it entered the cattle feed business a few years ago.

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Comments (1)

a vet who cares about animals - 28 Apr 2017 | 05:34

Stuff in one more steer?

The photos in this article are worth a thousand words - is this where your omaha steak comes from? How many more cattle can they stuff into these corrals? Would humans tolerate even one day with their faces up the rears of other people? No wonder many more people these days are becoming vegetarians! There is NO excuse for this animal abuse! No wonder antimicrobial drug resistance is growing at a logarithmic rate and so much meat has E. coli as an ingredient!

28-Apr-2017 at 05:34 GMT

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