Cargill to sell two Texas beef cattle feedlots to Texas-based Friona Industries
09 Jul 2016
US agribusiness giant Cargill Inc yesterday said that it will sell two Texas beef cattle feedlots to Texas-based Friona Industries.
Under the deal, Friona Industries will acquire Cargill's cattle feedlots at Bovina and Dalhart, Texas, but retain its cattle feed yards at Yuma, Colorado and Leoti, Kansas.
Friona Industries already supplies Cargill with cattle from their four feed yards. The Texas feed yards that are being sold will continue to supply cattle to Cargill's beef processing plants.
Cargill did not disclose the financial terms of the transaction, but the sale comes just three days after it agreed to sell its ag-retail business in the US to Canada's Agrium Inc. (See: Cargill to sell ag-retail business in the US to Canada's Agrium)
The sales are part of Cargill's plan to streamline its business by selling non-core units in order to boost its earnings.
Last month, it also struck a deal to buy Five Star Custom Foods, Ltd, a company specialising in cooked protein products, soups and sauces for restaurants and food processors, and sold its US pork unit.
Over the past 12 months, Cargill has announced approximately $500 million in acquisitions and capital investments to grow its North American protein business.
Investments include purchase of a beef processing plant in South Carolina and a custom cooked meats, soups and sauces business with plants in Texas and Tennessee, conversion of a Nebraska ground beef plant to a specialised cooked meats plant, a new beef distribution center at the company's Kansas beef processing facility, and an expansion of egg processing capabilities at a Michigan plant.
''Selling our feed yards in the Texas panhandle allows us to redeploy many tens of millions of dollars annually into investments that will help us grow our protein business – money that otherwise would have been tied up as working capital used to purchase and feed cattle,'' said John Keating, president of Cargill's Wichita-based beef business.
Cargill said that the sale of Texas cattle feed yards aligns with its evolving protein business strategy which emphasises growth fueled by being the supplier of choice for customers and by providing them with superior products and services.