Springdale, Arkansas-based Tyson Foods has shut down one of its beef processing plants in Iowa, citing over-expanded costs of dairy cattle.
The plant, located in Denison, has been operated by the company since 2001, when it acquired Iowa Beef Processors.
"This was a hard choice on the grounds that it influences the lives of our kin, their families and a group that has bolstered this plant for over 50 years," Tyson Fresh Meats President Steve Stouffer told JHB News.
"What we're concentrating on is the way we're going to deal with their representatives."
Earlier this month, shares of Tyson Foods, the largest meat processing company in the United States, dropped by nearly eleven percent this week amidst disruptions in the beef industry as a whole.
Low cattle supply and high domestic prices have both contributed to unfavorable economic results: beef sales volumes dropped 3.9 percent within the quarter, Reuters reports. As a result, the company reported an operating loss of $7 million.
"Our beef business suffered from export market disruptions that had an $84 million impact on third-quarter results, and we continue to see very high cattle costs at a time when product values and export issues are making it difficult to realize expected revenue levels," Tyson President and CEO Donnie Smith told USA Today.
Tyson Foods officials have dropped its adjusted earnings forecast down to $3.10 to $3.20 per share down from its original $3.30 to $3.40 expectations.
Despite the drop in shares and revenue, the company's leadership looks to maintain a dominant position within the industry and find ways to improve sales figures. Tyson Foods is poised to receive $300 million in synergy cost savings for the current year.
"We've positioned ourselves well for fiscal 2016 and we're confident in our ability to achieve at least 10% annual earnings per share growth over time," Smith also told the site.
