About 300 workers will lose their jobs in April at Swift and Co.’s packing plant in Greeley because the company is eliminating one of its two meatpacking shifts.
Some of the jobs will be replaced by new processing equipment that Swift is adding to become more efficient, company spokesman Sean McHugh said Thursday.
Also, a Japanese ban on U.S. beef exports has driven down price margins and accelerated an industry downturn, McHugh said.
“This is a challenging, low- margin industry in the midst of the most challenging conditions of its life,” he said. “The prices of cattle are extremely high, and they’re also high in relation to the value of the boxed beef.”
Swift, which is based in Greeley, bills itself as the world’s second-largest processor of beef and pork, with $10 billion in yearly sales. It employs 2,000 workers at its Greeley plant.
The assembly-line cutting jobs pay $11.25 to $12.35 an hour.
McHugh said the company may rehire workers when demand picks up in the summer.
Cutters aren’t sure how to react to the news yet, after dealing with an 800-person layoff in December 2004, said Fernando Rod riquez, union director of packing for United Food and Commercial Workers Local 7 in Greeley. In that case, everyone who was laid off was rehired over time, Rodriquez said.
Greeley/Weld County economic-development group Upstate Colorado Economic Development played down the impact of the layoffs on the regional economy.
“Obviously, it’s a lot, but the positive is the historical perspective. When they’ve had layoffs, they’ve been able to hire people back through attrition,” said Larry Burkhardt, Upstate’s president.
Meatpacking companies and others that deal in commodities have seen operating margins drop steeply in recent years, said Gregg Warren, an equities analyst at Morningstar Inc.
“The downturn doesn’t surprise me very much, but the key in the last month is the expectation of lower export demand,” Warren said.
After the U.S. confirmed its first case of mad cow disease in December 2003, Japan banned U.S. beef. It reopened its beef market after intense lobbying from U.S. politicians but closed it again last month after veal cuts containing backbone were found in an export shipment. Asian countries consider the backbone a mad-cow risk.
Arkansas-based Tyson Foods said this week it would shut two beef-processing plants in Nebraska – laying off about 1,500 workers – citing difficult beef conditions in the United States.
Packing-plant closures also may squeeze area ranchers, said Kenny Rogers, a Yuma cattle rancher.
“It will add costs,” Rogers said. “Any time you take a player out of the game purchasing our end product, it will trickle down eventually.”
At the same time, the 2,100-employee Cargill packing plant in Fort Morgan plans to hire about 40 new workers in the next few weeks, said Mark Klein, a spokesman for the Kansas-based company.
“It’s a tough market out there for the packer. Like all processors, we have not been running at capacity,” Klein said. “But this, too, shall pass. It’s a cyclical market.”
Staff writer Beth Potter can be reached at 303-820-1503 or bpotter@denverpost.com.
