Swift Permanently Closes U.S. Cow Plant

[farmers_son]

http://www.cattlenetwork.com/content.asp?contentid=7213

Cattle Alert: Swift & Company Announces Closure Of Idaho Cow Plant

GREELEY, COLO. – August 5, 2005 – Swift & Company today informed the employees of its cow processing plant in Nampa, Idaho, that the facility will not resume operations and is being closed permanently due to market conditions and the inability to secure enough cattle to support continued operations. The plant already was closed the past two weeks for these same reasons.

The Nampa plant most recently employed 408 people, down from 560 in May 2003 when the U.S. border was closed to live Canadian cattle after a single case of BSE (Bovine Spongiform Encephalopathy) was first discovered in Canada.

Last month, the USDA succeeded in opening the U.S. border to live Canadian cattle under 30 months of age. The Nampa plant, however, processes older animals. With access to the over 30-month cattle supply from Canada cut off – combined with a lingering drought in the Northwest that has pushed domestic cow herds toward the Midwest – the plant has been forced to gradually reduce operating hours and staffing over the past two years.

“This is a very sad day for Swift & Company and for more than 400 employees and their families in and around Nampa,” said Dennis Henley, chief operating officer of Swift & Company. “We’ve worked very hard over the past two years to sustain operations at Nampa without adequate cattle supplies, but we can’t afford to any longer.”

Swift & Company will work with various government agencies and the United Food & Commercial Workers Union (UFCW) to help the affected employees with the transition and job placement assistance. The company also will look throughout the Swift system to determine if there are transfer opportunities within the company.

[farmers_son]

Same story, only from a more local perspective.

http://www2.kbcitv.com/x5154.xml?ParentPageID=x5157&ContentID=x67502&Layo ut=KBCI.xsl&AdGroupID=x5154


Nampa Beef Processing Plant Closes For Good
NAMPA -
Four hundred and eight jobs in Nampa are gone as a local beef processing plant closes shop for good. The plant, operated by Swift Foods and Company, has been in Nampa since 1916, according to a company official, and changed hands a number of times over the years. The latest company, ConAgra Beef, took the reins in 1985 and created spin-off company, Swift Foods and Co. which operated the Nampa plant.

It was a stable job for hundreds, and now it's closure could impact the entire community, not to mention devastated families. Plant employees were given only one days notice that they'd be out of work.

Two of the men Local Two News spoke to have been working at the plant for ten years and yet were given notice of the closure, along with everyone else, on the day the plant ceased operations.

"My husband doesn't have a job. I don't know what's going to happen," said worried wife and mother of five, Shannon Ruiz. The Ruiz family also has a new grandson to care for, and husband and father for the group, Salvador, is no longer contributing an income. Salvador also speaks little English, and his wife says that will make it hard for him to find steady work somewhere else.

"I'm not mad, I just feel bad that I can't work for my family," he said in Spanish. Shannon says supporting the family is now in jeopardy.

"Yes it is because i don't make enough to keep this family going," she said.

"I couldn't believe it. I've been working there for ten years and they closed it down," said another plant worker, Candelario Mendosa.

Swift Foods representative Jim Herlihy says two reasons contributed to the plants demise: closures on Canadian beef entering the U.S. in 2003, and a continuing drought in the Northwest, pushing domestic cattle herds farther east.

Shortly after the border closures and first U.S. Mad Cow Disease case in December of 2003, the Nampa plant dropped 25 positions. The border opened back up to Canadian exports in mid-July of this year, but only to cattle under 30 months old, which didn't apply to the Nampa plant, which processes older cattle. It was quiet until two weeks ago when the plant began cutting operations and laying off workers.

"The plant has been closed this week and last week already because of market conditions lack of cattle to keep it functioning so for that reason it didn't make a lot of sense to bring people back to work," said Herlihy.

"We did everything we could and i know the local manege of that plant did everything they could to ensure the viability of that location," said Nampa mayor Tom Dale. However, it wasn't enough, and it was a message to the city that changes are happening in the farming community.

"The treasure valley economy is shifting from an agricultural base to a service industrial base. That shift is unstoppable," said Dale.

But it's little consolation for just over four hundred local workers, dealing with much bigger issues.

"Right now the biggest thing is trying to support my two daughters," said Mendosa.

In lieu of giving workers a 60 days notice of the closure, they will remain on the payroll for the next 60 days and both the city and Swift and Co. say they'll offer transitional help for these workers.

[rkaiser]

A sad day for Swift and company, but a joyous one for Tyson foods.

But remeber folks, the truth is that as long as there are two bidders for cows, we still have a competitive makertplace. Hogwash! The continued border closure to OTM cattle has nothing to do with science, only money and power as shown once again by this situation with Swift.

[cowman]

Well I guess R-CALF was right? Canadian cattle really do affect the prices paid for American beef? Obviously someone was outbidding Swifts for the available(American) cows?
No cows, from Canada, and Swifts can't compete? Somehow I don't think this is the whole story? I mean do we have even one plant in Canada that was built in 1916? Obviously the two workers were Mexican, which indicates Swift probably wasn't breaking the bank on wages?
One less plant, however, to slaughter cows once the border opens! I would think a modern big cow plant is going to be a necessity, somewhere down the road? Hopefully it would be in Canada, but it looks like if Cargill or IBP don't build it, it won't get done?

[farmers_son]

While the plant has been in Nampa since 1916 it has been sold a number of times and Swift is just the last of a string of owners. If the plant has been sold often in the past you would wonder why Swift did not just sell it instead of closing the plant. One reason is the plant could be old but just because a plant has been in the town since 1916 doesn’t mean it has not been completely renovated.

None of the news reports say the plant is closing because it is outdated or antiquated. We cannot overlook the possibility that the plant is closing instead of being sold because Swift does not want to compete with the plant.

I note the concern Swift is expressing for its workers and the town. What would happen if Swift offered the workers the opportunity to purchase the plant and they operate it themselves. Perhaps the town would participate as well as local producers. We will never know what would happen because Swift will not want to compete with this plant and will instead shut it down.

[cowman]

Well I think Swift indicated part of the reason was because the cow herd had shrunk in that part of the country? Makes more sense to build a new plant closer to the cow source? They probably operated on the basis of cheap Canadian cows prior to BSE, and when they had to step up to the plate and compete for more pricey American cows the money just wasn't there?
Another statement I saw was the plant was not set up to effectively compete in the young fat trade? This indicates to me that it was an old inefficient plant that couldn't compete with the modern plants? It is very difficult to renovate an older plant to compete with modern plants...the structure just isn't right.
If a large packer like Swifts couldn't cut it a bunch of workers certainly wouldn't? First of all where would they get the capital? Secondly where would they get the marketing expertise that a large company like Swifts would have? The beef business is very complex and marketing is a really big deal. You just don't hire some idiot out of college and go to town? Most beef salesmen have been in the business for a long time and have developed a lot of personal contacts? As in any business it is usually who you know, not what you know? Just a fact of life.

[farmers_son]

It should not be assumed that just because Swift is closing the plant that is was not profitable. Does it make more sense to build a new plant than to keep an existing plant operating? In Canada at least the cost of building a new plant seems to prohibitive as we are not really seeing a whole bunch of new construction and industry claims of a 25% increase in Canadian packing capacity seem to be suspect and based more on extra shifts than extra floor space.

“If a large packer like Swifts couldn't cut it a bunch of workers certainly wouldn't?”

It should be pointed out that the workers were cutting it, and without the workers the management would not get much production. Management is important but in Canada there is a focus on making sure that a source of labour was available before building a new plant. Not a problem in Nampa.

And while your comments on marketing expertise are valid your most important comment was where would they get the capital. Sourcing capital is a problem. But really how much capital would it take, after all Swifts is going to mothball the plant. Can’t be worth millions anymore.

My point was that Swifts may be closing this plant rather than sell for competitive reasons. Competition or rather the packing industry's ability to limit competition is key to understanding the packing industry and why they do the things they do.

[grassfarmer]

It seems a murky business the packing sector, closing plants to prevent competition. It's a shame that this plant couldn't have been bought for cents on the dollar by one of the Canadian groups trying to set up a cow plant. If the situation were reversed and a newly built Canadian plant was going to be closed down there would be no problem for a US packer to buy it for cents on the dollar.
There was talk at one point of the feasability of trucking our cows stateside to kill even if it meant trucking the beef back - surely that should be easier now, politically at least, given that they have BSE too?

[cowman]

Well that may very well be true about Swifts not wanting any competition or it may be the plant was basically wore out and nobody wanted it? Consider what happened to the Canada Packer plants when they shut them down? The Red Deer and Lethbridge plant were right up to snuff and very profitable until Cargill came in and ran them out of business?
You might find it interesting that the Sunterra plant at Innisfail, that started up this spring, was basically outfitted with the hardware out of the mothballed Canada Packers plant in Red Deer? I don't know why Sunterra just didn't buy and open up that CP plant, but then the real estate is worth a fortune and they probably found it cheaper to build in Innisfail.
Grassfarmer: Thank heavens there isn't a "producer group" dumb enough to buy an old mothballed plant in Idaho! In case you haven't noticed they aren't letting cows cross the border, so what would you use it for? Either your idea here, lost something in the translation or you have been hanging out with too many dreamers lately!