Cargill's announcement today that it is shutting down was everything short of a surprise - at least for one person.
Wesley Welch manages the Spade Ranches in Lubbock. He says his cattle are packaged at Cargill.
"There wasn't as much need for as much packing plant capacity as what they had. But I didn't expect it to come this early," said Welch.
Welch says things like this are inevitable, especially when going toe-to-toe with Mother Nature.
Cargill is closing its West Texas Plant on February 1st. They say harsh weather conditions are the reason for a tight cattle supply.
"This industry has been built up to a certain level and now we're back down to the 1950's levels and it's not sustainable for the current size so there's going to be some people who go out of business and this is the first example of it locally," Welch said.
The nation's cattle herd is at its lowest level since 1952 and on February 1st, more than 2,000 Cargill plant workers in Plainview will be laid off. But Welch says it won't just stop with Plainview.
"There could be some closures in feed yards. We got an over capacity and we've overbooked the feed lot segment of our industry. So I could see some of those closing their doors until we can rebuild our herd," he said.
Rebuilding a herd is a lot easier said than done. But that's exactly what Welch and other area ranchers are trying to do.
"We destocked a lot of our ranches. On a lot of our country where we got about half as many cows as we usually run, were trying to stretch our grass further so we don't have to feed as much."
Welch said even our market saw a significant drop just today.
"It was just a reaction to that closure and the fact that so many producers and feed lots in this region in essence lost a customer, a very large customer."
Although the cattle industry just lost a significant customer, Welch is trying to see the light in all of this.
"I know it couldn't get much worse. I feel like it couldn't get much worse. I guess I'm somewhat optimistic."
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