Tyson Foods late Thursday said it will consolidate its beef plants in the Pacific Northwest as part of a comprehensive plan to operate its fresh meats business more efficiently.
Effective October 16, Tyson Fresh Meats will permanently close its beef slaughter plant in Boise, Idaho, and scale back processing operations at its Pasco, Washington, complex. The Pasco plant has historically operated one shift of beef slaughter and two shifts of beef processing. After October 16, Pasco will continue to operate one slaughter shift; however, because the plant will no longer be receiving beef carcasses from Boise, it will operate only one processing shift instead of two.
The changes involving Boise and Pasco are also part of an initiative aimed at improving the performance of Tyson's beef and pork business. As a result of this initiative, Tyson consolidated beef plants in northeast Nebraska earlier this year, continues to improve production line and staffing efficiency at other plants and has been simplifying and streamlining its beef and pork product mix.
"The Boise plant has performed reasonably well for many years; however, market and economic conditions have changed," said Jim Lochner, Tyson senior group vice president. "There's more beef slaughter capacity than available cattle, while the cost of transporting beef carcasses from Boise to Pasco for processing has increased significantly."
The closing of the Boise plant means the elimination of beef slaughter capacity of 1,600 cattle per day, or about 470,000 cattle a year. It will also result in the elimination of all 270 jobs at Boise and approximately 500 positions at Pasco. Total workforce at Pasco will be reduced to about 1,200.
Prudential Securities analyst John McMillin said U.S. beef processing is facing a tough stretch in the near future, with high prices seen for October, along with tighter supplies.
"We would prefer to see capacity cuts made by weaker, inefficient players rather than the number one player, but hopefully, Swift and Smithfield will make similar moves", the analyst said.
Much of the production equipment and cooling components will be removed from the Boise plant for use at other Tyson facilities. Company officials expect to explore the sale of the property, which includes approximately 1,500 acres, for possible use by real estate developers. Due to the estimated fair market value of the Boise property the company does not anticipate incurring any charges as a result of the Boise closure.
In addition to Pasco, Tyson operates domestic beef plants in Denison, Iowa; Joslin, Illinois; Emporia and Finney County, Kansas; Dakota City and Lexington, Nebraska; and Amarillo, Texas. The company also owns Lakeside Packers, a beef complex in Brooks, Alberta.