Beef steaks, packaged and ready for grocers’ meat cases, move down a conveyor at the Tyson Foods plant in Eagle Mountain. Tyson has announced that the plant will close in a move to cut company losses. (Photo from Food Engineering)
Tyson Foods opened its beef processing and packaging plant in Eagle Mountain to great fanfare in late 2021. Now the facility is closing.
Springdale, Arkansas-based Tyson Foods has announced the shuttering of three beef facilities, including the 600,000-square-foot Utah plant, as the meat giant struggles with a corporate restructuring that it hopes will overcome recent heavy losses. At least 2,500 workers will lose their jobs in the move.
“Tyson Foods is making strategic changes to its beef operations to position the company for long-term success,” the company said in a statement issued Aug. 13. “Tyson Foods will anchor its beef business around three strategically located beef facilities in the central United States: Dakota City, Nebraska; Holcomb, Kansas; and Amarillo, Texas, to create a more competitive footprint amidst one of the most historic cattle shortages the country has ever experienced.”
In its third fiscal quarter, reported earlier this month, Tyson’s beef segment revenue declined 3.9 percent with a 16 percent drop in volume. The company’s beef business losses totaled $138 million in the quarter, up substantially from the $116 million it lost the previous year. The company said it expects beef segment losses to range between $500 million and $650 million for the full fiscal year.
Tyson blames the losses largely on a declining U.S. cattle herd and higher consumer prices.
The company said it will end operations at its Joslin, Illinois, beef facility in addition to the Eagle Mountain case-ready facility. Capacity from these locations will be moved to “more strategically located” facilities with ample capacity to grow. Additionally, Tyson is trying to sell its Pasco, Washington, beef facility. With these changes, the company will ramp back up a second shift it eliminated earlier this year at its Amarillo facility, as cattle become available.
The newly announced beef plant closures aren’t the first for Tyson. The company announced last November the closure of its beef plant in Lexington, Nebraska, eliminating 3,200 jobs. Tyson was by far the largest employer in the town with a population of around 11,500.
“Collectively, these changes will allow the company to maintain a similar level of cattle harvesting across a more efficient and modern network,” the Tyson statement concluded.
U.S. cattle herds are at lows not seen in decades, according to the U.S. Department of Agriculture, with many ranchers hesitant to rebuild after years of climate challenges and tough economics. The resurgence of a flesh-eating pest called the New World screwworm has also further threatened supply and made it more difficult for the U.S. to import beef from Mexico, the USDA said.
Consumers seem to be shifting away from beef on their tables as prices continue to soar. The average retail beef price reached an all-time high of $9.64 per pound in April, according to industry website FoodDive.
Tyson specifically declined to give a closing date or the number of current employees at the plant. Enquiries to both corporate headquarters and the Utah plant went unanswered. However, recent reports place the number of current employees at the plant in the neighborhood of 725. Area organizations, including the Valley Crossroads Chamber of Commerce and the Utah Department of Workforce Services, are working to mitigate the impact of the layoffs. Officials have also estimated a two-month winddown to full closure of the facility.
Tyson announced the plans for the $300 million Eagle Mountain case-ready cutting and packaging operation in late 2019. The plant takes large cuts of beef and pork shipped in from other Tyson operations and converts them into steaks, chops, roasts and ground meat to be packaged, weighed and labeled on retail trays that are shipped and sold in grocery stores. At the time the plant opened in 2021, the company said it would begin operation with about 800 employees with a projected annual payroll of $44 million. It said the operation had the capacity to grow to 1,200 employees.
The meat producer received state tax incentives from the Governor’s Office of Economic Development for the project, based on an estimated $27 million in new state tax revenue over the first 10 years of its operation.
Analysts with Little Rock-based Stephens Inc. estimated annual savings from the actions announced by Tyson to be between $100 million and $150 million, according to a report on the Talk Business & Politics website.
