


"The U.S. cattle herd is at its lowest level since 1952," Cargill president John Keating said in a news release. "Unfortunately, the drought has not broken, feed costs remain higher than historical averages and the herd continues to shrink."


U.S. Agriculture Department Secretary Tom Vilsack spoke of the closure in his weekly radio notes Tuesday, calling it a "significant loss" to the region's livestock industry. He noted that USDA inspectors were among those in the town, population 22,000, who could be forced to relocate to stay employed.


"Cargill made the decision they were going to shutter this plant because from their standpoint they couldn't justify paying the price of cattle that they had to pay," he said.



"Texas in particular had overcapacity both at the cattle feeding level and at the packing plant level," he said. "All it's done on that level is to realign packing plant capacity for the moment with current supplies."





"It's put producers in a cost squeeze," White said. "Even though they're getting more for their animals, they're having to pay more to raise those animals. The profit margin has not been there."