Meat Industry INSIGHTS Newsletter

980120 IBP to Close Minn. Beef Plant in March

January 6, 1998

Chicago- IBP Inc announced it will permanently close its beef plant in Luverne, Minn., due to unfavorable economic conditions.

"The primary reason is that the marketplace has changed, there's simply not enough cattle to warrant keeping that particular plant in operation," said Gary Mickelson, IBP spokesman in a statement.

The plant closing, effective March 7, 1998, will affect 370 employees. The company said they would be given the opportunity to interview for jobs at other IBP facilities.

"It's unfortunate, but there are other facilities that have the production capacity to accommodate those cattle that Luverne has been handling," Mickelson said.

A decline in fed cattle supplies in Minnesota, nearby Iowa and South Dakota have made it difficult to supply the two-shift Luverne operation, the company said in a statement.

Minnesota fed cattle marketings have declined by about 30 percent over the past six years, to an estimated 330,000 head in 1997 from 490,000 in 1991, IBP said.

The Luverne plant has a daily capacity of 1,700 cattle per day and an annual capacity of about 500,000, IBP said.

"Even if cattle supplies were adequate, millions of dollars in capital improvements would be needed to keep the plant operating and competitive," the company statement said.

The Luverne beef plant has been part of IBP since the company merged with Sioux Quality Packers in October 1966. It began operations in late 1962 as MID Packing Company.

Livestock pens at the facility will continue to be used after operations cease, allowing cattlemen to deliver animals for later transfer to another IBP plant.

IBP operates 11 beef plants in the United States, including the Luverne plant, and one in Alberta, Canada.

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