About 300 meatpacking workers at Greeley’s Swift & Co. plant will lose their jobs this spring.
Swift, which bills itself as the world second-largest processor of beef and pork, with $10 billion in yearly sales, plans to shut down one of its two packing shifts at the 2,000-worker plant in April, said Sean McHugh, a Swift spokesman. A Japanese ban on beef imports has driven down price margins and forced an industry downturn, McHugh said.
“This is a challenging, low-margin industry in the midst of the most challenging conditions of its life,” McHugh said. “The prices of cattle are extremely high and they’re also high in relation to the value of the boxed beef.”
Concerns about mad cow disease have hurt U.S. beef imports overseas.
But in general, U.S. consumers continue to eat the same amount of beef and pork, McHugh said.
Cutters on the packing floor aren’t sure how to react to the news yet, after dealing with an even larger 800-person layoff in December 2004, said Fernando Rodriquez, union director of packing for United Food and Commercial Workers Local 7 in Greeley. In that instance, everyone who wanted to come back to work was hired back, Rodriquez said. Workers who debone, cut up and package beef carcasses make from $11.25 up to $12.35.
“It’s rough at the get-go, but it smooths out at the end,” Rodriquez said.
Packing companies and others that deal in commodities have seen operating margins drop steeply in recent years, said Gregg Warren, an equities research analyst covering packaged goods 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.
Tyson Foods recently said it would shut down two plants in Nebraska, displacing about 1,500 workers, citing difficult beef conditions in the United States.
Packing plant closures may also squeeze area ranchers, said Kenny Rogers, a cattle rancher in Yuma.
“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.
