- Cargill plans to close its fresh and frozen whole turkey production in November at its plant in Waco, Texas. Daniel Sullivan, media relations director for Cargill North America, said in an email to Food Dive the company made the decision "upon careful consideration," and that, with limited exceptions, "the vast majority of employees were offered other positions."
- It's not clear how many workers are at the plant now, but the facility had about 700 in 2011, the Waco Tribune-Herald reported. Sullivan said Cargill will continue to operate the cooked meats portion of the facility, which produces pre-sliced and other deli products.
- Cargill has other turkey production plants in Arkansas, Minnesota, Missouri, Nebraska and Virginia, according to WATTAgNet. The company produces turkeys under the Honeysuckle White, Shady Brook Farms, Honest Turkey, Charter Reserve and Castlewood Reserve brands. It is the third-largest producer in the U.S. after Butterball and Jennie-O, the publication noted.
Although Cargill didn't explain why it is shutting down whole turkey production at the Waco facility, the move is likely tied to recent trends in the industry.
U.S. turkey production is down since last year, although per-capita consumption has only fallen slightly from a high of 16.6 pounds in 2016, according to data from the U.S. Department of Agriculture's Economic Research Service. Another indicator of change is average wholesale prices, which dropped from $1.17 per pound in 2016 to 81 cents per pound last year, USDA data shows.
This trend seems to have especially impacted Cargill. Statistics from WATTAgNet show the company produced 950 million pounds of live turkeys in 2018 — a 5% drop from 2017.
This isn't the first time Cargill has cut production at the Waco plant that opened in 1965. In 2002, the company reduced operations by 40% just before Thanksgiving, according to the Plainview Daily Herald, citing a glut in turkey meat.
Stockpiles of frozen birds routinely build up during the year before the Thanksgiving and Christmas holidays start depleting them. Last year, whole-turkey prices hit their lowest level since 2010, according to a USDA report from August 2018 cited by Bloomberg. The department said the large supplies in cold storage were proof that production had outstripped demand.
Since Cargill has turkey production facilities in five other states beyond Texas — and because it plans to keep making pre-sliced and other deli products at the Waco facility — the company probably won't feel any serious pain from its decision to shut down fresh and frozen whole turkey production there.
Cargill has closed other production facilities in the past few years, including a beef plant in Milwaukee, which shut down in 2014, and a malt plant in Spiritwood, North Dakota, which closed this past October. These closures were blamed on a tight cattle supply and a lack of demand for locally produced malt from six-row barley.
Meanwhile, Cargill is moving closer to alternative proteins. This year, the company invested $75 million more in Puris, a pea protein producer, following an investment of $25 million in 2018. Cargill also participated in a $12 million funding round for Aleph Farms, an Israel-based startup producing meat from cattle cells. And in 2017, Cargill invested in Memphis Meats, which produced the world's first cell-cultured meatball and chicken strip.
These decisions indicate a different direction for the company as it positions itself more toward the promising future represented by plant-based and cell-based protein products and potentially less in conventional protein items that are routinely subjected to volatile swings in commodity prices.