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Published on Monday, May 8, 2017

Top U.S. Beef Producer Shifts Focus Toward Plant-Based Proteins

[INSPIRING]

Top U.S. Beef Producer Shifts Focus Toward Plant-Based Proteins

Cargill is an agricultural commodity business known for raising livestock and producing feed. But in the past year Cargill has begun to switch their focus in the protein industry and have now sold all of their U.S. feedlots. In July 2016 they sold their feed yards in Bovina and Dalhart, Texas, and recently Cargill sold their last feedlots in Leoti, Kansas and Yuma, Colorado. Now Cargill wants to invest in the growing industry of plant-based proteins.


Reason for Selling

This $36.7 million deal may come as a shock to most people, especially since Cargill intends to shift their investments to alternative sources of protein. Cargill spokesman, Mike Martin, said that the company wants to shift their focus to plant-based protein, fish, and insects. Cargill also wants to explore other business opportunities linked with livestock and poultry. According to John Keating, the president of Cargill Wichita, Kansas, “Selling our two remaining feed yards aligns with our protein growth focus by allowing us to redeploy working capital away from cattle feeding operations to other investments.”


In the past two years Cargill has focused on their growth in the North American protein industry. According to the Star Tribune, they’ve sold portions of their business with low margins and have “invested about $560 million in acquisitions and capital investments.” In 2016 they bought a Texas-based specialty cooked meats producer, Five Star Custom Foods. Now Cargill has taken over to sell meats to restaurants that will be used for pizza, soup, and more. Two years ago Cargill also let go of their pork business and made a $1.45 billion deal with JBS USA Pork and two pork processors to take over.


Now there is a higher demand for protein alternatives than ever before. According to One Green Planet, consumers spend approximately $600 million on meat alternatives annually. There is a growing awareness of animal welfare, human health issues and environmental impacts of meat production and consumption. More and more people want to eat plant-based protein sources that are cleaner and have less of an impact on the environment, animals and human health.


Cargill’s Claim to Fame

Although Cargill has sold all of their U.S. feedlots, they are not stepping out of the beef industry completely. The new owners of the Colorado and Kansas feedlots will continue to supply cattle to Cargill’s beef processing facilities in Fort Morgan, Colorado and Dodge City, Kansas. Green Plains Cattle Co. has also agreed to offer jobs to Cargill employees that will be affected by the transaction. Despite their step away from raising cattle, Cargill still has a number of beef processing plants across the western, central and southern United States.


Cargill is known as one of the largest beef producers in the United States. Collectively, Cargill and three other companies account for over 70 percent of the U.S. beef market. In addition to beef production the company also works to trade, purchase and distribute goods such as grains, palm oil, vegetable oils, glucose syrups and more. The company has been subject to environmental scrutiny for their destructive livestock feed production and deforestation practices to obtain palm oil. But now environmentalists might be surprised to hear that Cargill is slowly backing out of beef production and redefining their role in the protein business.


Cargill is undergoing big changes in the protein industry and it will be interesting to see what their next moves will be. In the coming years, will they still play a big role in the livestock business? Or will we see them make significant shift towards alternative sources such as plant-based protein, fish and insects?


 

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Author: AThompson

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