WICHITA, Kan. – Cargill reached an agreement to sell beef cattle feed yards in Bovina and Dalhart, Texas to Amarillo, Texas-based Friona Industries LP. Terms of the deal were not disclosed.
“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,” John Keating, president of Cargill’s Wichita-based beef business, said in a statement. “This decision makes sense particularly because we have a terrific and longstanding business relationship with Friona Industries, which already supplies Cargill with excellent cattle from their four feed yards. The Texas feed yards we are selling will continue to supply cattle to our beef processing plants while also enhancing Friona Industries’ feed yard portfolio.”
Approximately 90 individuals work at the feed yards in Bovina and Dalhart, Texas. The company said the transaction will be finalized upon the completion of definitive agreements and any regulatory reviews. Cargill will keep cattle feed yards in Yuma, Colorado and Leoti, Kansas.
The sale of feed yards to Friona Industries is the latest step in Cargill’s strategy of expanding the company’s beef business. Keating said selling the feed yards enables Cargill to invest in projects that enhance capabilities and increase value for the company’s customers. For example, Cargill acquired a Five Star Custom Foods, which has a beef processing plant in South Carolina and a custom cooked meats, soups and sauces business with plants in Texas and Tennessee. Cargill also converted a Nebraska ground beef plant to a specialized cooked meats plant; opened a new beef distribution center at the company’s Dodge City, Kansas, beef processing facility; and expanded egg processing capabilities at a Michigan plant.
“We have a lot of positive momentum and are confident it will continue to build going forward as we continue to help our customers’ businesses thrive,” Keating said.