Reuters — Cargill, a top U.S. meat processor, said Friday it will sell two Texas beef cattle feedlots to Amarillo-based Friona Industries pending final agreements and regulatory reviews.
Under the deal, Friona will acquire Cargill’s cattle feedlots at Bovina and Dalhart, Texas. Cargill said in a statement it will retain ownership of its cattle feedyards at Yuma, Colorado and Leoti, Kansas.
Terms of the pending sale were not disclosed.
The sale of the two feedyards, in the west of Texas’ northern panhandle, will allow the company to redeploy tens of millions of dollars annually into investments to help its protein business, said John Keating, president of Cargill’s Wichita-based beef business.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
It is money that otherwise would have been tied up as working capital used to buy and feed cattle, he added.
Cargill has an established relationship with Friona. The company’s existing four feedlots supply Cargill with cattle.
The sale is the latest of a series of changes at the 151-year-old company aimed at paring back parts of its business to bolster margins.
Cargill streamlined its executive team last year to speed up decision-making and has sold off some operations including its U.S. pork unit and U.S. ag retail business.
— Reporting for Reuters by Theopolis Waters and Karl Plume in Chicago.
