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Tyson Foods, the largest U.S. beef producer, said it will halt cattle slaughtering at a plant in Kansas and eliminate 1,500 jobs because of surplus production capacity and rising costs to buy livestock.
The 2,400-worker plant in Emporia, Kan., will cease slaughter operations in the next few weeks, Springdale, Ark.-based Tyson Foods said Friday. The facility will remain in use to process ground beef and as a cold-storage and distribution warehouse, Tyson said.
"There continues to be far more beef slaughter capacity than available cattle, and we believe this problem will continue to afflict the industry for the foreseeable future," Chief Executive Officer Richard Bond said in the statement. "We estimate the current slaughter overcapacity in the industry to be between 10,000 and 14,000 head of cattle per day."
The company said in November that it would earn 30 cents to 70 cents a share for the year that began Oct. 1, below analysts' estimates, partly because of lower-than-expected profit from its beef segment, which accounts for almost half of sales.
Tyson shares fell 23 cents to $13.26 Friday. The shares have fallen 16 percent in the past three months.
The U.S. supply of slaughter-ready cattle probably won't see "appreciable growth" for the next two to three years, Tyson said. Record grain prices caused partly by the use of corn for ethanol have increased costs for feed and land, and the number of cows being retained for calf production also is falling, Tyson said.
"At a time in the cattle cycle when cattle numbers should be at or near their highest, the level of production is not approaching its historic peaks . . .," said Jim Lochner, senior group vice president of Tyson Fresh Meats.
The 2,400-worker plant in Emporia, Kan., will cease slaughter operations in the next few weeks, Springdale, Ark.-based Tyson Foods said Friday. The facility will remain in use to process ground beef and as a cold-storage and distribution warehouse, Tyson said.
"There continues to be far more beef slaughter capacity than available cattle, and we believe this problem will continue to afflict the industry for the foreseeable future," Chief Executive Officer Richard Bond said in the statement. "We estimate the current slaughter overcapacity in the industry to be between 10,000 and 14,000 head of cattle per day."
The company said in November that it would earn 30 cents to 70 cents a share for the year that began Oct. 1, below analysts' estimates, partly because of lower-than-expected profit from its beef segment, which accounts for almost half of sales.
Tyson shares fell 23 cents to $13.26 Friday. The shares have fallen 16 percent in the past three months.
The U.S. supply of slaughter-ready cattle probably won't see "appreciable growth" for the next two to three years, Tyson said. Record grain prices caused partly by the use of corn for ethanol have increased costs for feed and land, and the number of cows being retained for calf production also is falling, Tyson said.
"At a time in the cattle cycle when cattle numbers should be at or near their highest, the level of production is not approaching its historic peaks . . .," said Jim Lochner, senior group vice president of Tyson Fresh Meats.
