BRAWLEY – Bobby Lofton, owner of Superior Cattle Feeders, LLC, recently spoke at the Brawley Rotary Club on the current climate of the cattle industry in the Imperial Valley. Lofton especially addressed the industry’s course since the closing of National Beef last year in early June.
The closure affected the entire Valley, as its tentacles reached into every aspect of the economy. Over 1300 employees lost their jobs and many ancillary businesses were affected as well.
It was hoped another company would buy the facility and continue the business.
That has not happened.
“Prior to the closing of National Beef, every feedlot was full in Imperial Valley,” Lofton said.
“We received word on February 1st that they were closing in April,” continued Lofton. “It was a shock to all of us. It was a scramble to see where we would send our cattle. The weather is tough here in the summer to feed cattle so I had been sending some cattle to different feedlots in Kansas, Colorado, Texas, and northern California just as an experiment to see how they would perform in comparison to here in the Valley.”
“I can tell you,” said Lofton. “This is the best place in the country to feed cattle. They perform better here.”
“We made some concessions and got National Beef to extend their closing from April to June,” said Lofton. “We were able to run a lot of cattle through the plant and the rest were scattered throughout the west. We currently run our cattle through California plants and the rest go out of state. We knew the cattle industry would survive at some level in the Valley, but we didn’t know what it would be. It has actually done better than what any of us had imagined.”
“Mexico was our first most attractive idea, but government policies of getting cattle across the border has been a strain. The biggest hurdles to overcome there is our product in the U.S. has the USDA grade. We can’t get that in Mexico. We can harvest them down there and get the carcasses graded here. The risk side is that we don’t get paid until 3 or 4 weeks after we harvest the cattle. That is unacceptable to most of us.”
“We have taken some cattle to Harris Ranches. We take them at 850 to 950 pounds. We then put about 120 days on them and then off to their plant. I have quite a few of my cattle going that way.”
There are plenty of rumors of companies interested in buying the National Beef plant, which, when built in 2001, was state of the art and the first beef plant built in twenty years.
“It takes so much equity to run one of these plants,” said Lofton. “JBS is rumored to have some interest in the plant. Tyson and Agri-Beef have also showed some interest. JBS got local feedlot owners together a couple of weeks ago and assured us that they would take all of our cattle. This allows us to have something to work with. They are trying to keep control of these cattle. JBS has invested $70 Million in their Hiram, UT plant and $25 million in their Tolleson, AZ plant. This tells me that they probably would not do anything with this plant for a period of time. The last time that JBS was interested in this plant, the Department of Justice wouldn’t allow it because it would give them too much control of the industry. I do see opportunity to reopen the plant, but not anytime soon. But, we still have an industry here.”
“I have a feedlot in Texas, but the Valley is the focus of my future.”
“We had 86,000 head when the plant closed,” said Lofton. “We got down to 58,000 there for awhile. We are at 70,000 head now. Most feedlots in the north end of the Valley are full. This is where the market is today. There’s always an evolution in the business. The feed yard side of it will continue to have a strong industry here.”
Lofton fielded some questions from the audience such as, “Is National Beef intentionally letting the plant sit dormant for a couple of years?”
“They have it priced like they may have that in mind,” said Lofton. “They spent much effort to build their market here in the west. If they sell it, they would be competing with whoever bought it. They are going to protect those markets. They still have a skeleton crew keeping everything in shape. They are running the refrigeration in the cold-room to keep bacteria from growing there.”
“If the plant had been originally built in Yuma, do you think the plant would still be in operation?”
“Absolutely,” said Lofton.