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.
Tyson Foods cites the shortage of available cattle as the reason for the reduction in production of beef.
Reuters adds that closures like this are common due to fewer cattle available brought about by the severe Midwestern drought.
Available cattle for slaughter are affected by the shortage of feed crops.
Steve Stouffer, president of Tyson Fresh Meats, said in the press release that the reduction of beef production is needed.
"The cattle supply is tight and there's an excess of beef production capacity in the region," he said. "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."
Industry experts told Reuters that Tyson's plant in Denison has an estimated daily slaughter capacity of 2,000 head of cattle over a five-day work week.
This figure represents about 2 percent of U.S. steer and heifer slaughter capacity.
Reuters adds that the remaining cattle that will no longer be processed will probably be transferred to Tyson Foods' plants located nearby.
The closing of the Denison plant will affect 400 of Tyson Foods workers.
"This was a very difficult decision because it affects the lives of our people, their families and a community that has supported this plant for more than 50 years," Stouffer said in the press release.
He added that the company has to adapt to the "realities of the beef business" for them to continue to be successful.
Tyson Foods, though, is offering the 400 affected workers an opportunity to apply at the company's other locations, according to the press release.
Financial incentives are also being offered to hourly workers who qualify for production openings at Tyson's Lexington, Nebraska plant.
The displaced workers will also be receiving 60 days of pay, per the requirement of the Worker Adjustment and Retraining Notification Act, according to the press release.
