WHY IT MATTERS: The U.S. cattle herd is at its lowest level in nearly 75 years, pushing up prices and challenging packers’ margins.

The Cargill Meat Solutions facility will stop production around mid-April and fully close around the end of May, a notice filed by Cargill with the Wisconsin Department of Workforce Development said. The plant specializes in fresh beef, ground beef, and value-added products but does not slaughter cattle.

Cargill said the move was made “to better align our portfolio with current customer demand and prioritize investments,” adding that ground beef production will shift to its other North American facilities with no impact on its consumer contracts. The company operates seven other facilities in the state and some of the employees affected are expected to move to one in nearby Butler, Wisconsin.

The Milwaukee plant closure comes after rival meatpackers JBS and Tyson Foods announced they were shuttering beef plants late last year.

Beef prices are hovering near record highs due to strong demand and reduced supply. U.S. President Donald Trump on Friday signed a proclamation to hike low-tariff imports of Argentine beef.

U.S. beef packers have been losing money as tight supplies of cattle forced them to pay more for the livestock they slaughter and process into hamburgers and steaks.

The U.S. cattle herd has dropped to the lowest level in nearly 75 years due to persistent drought that dried up grazing pastures. A halt on U.S. imports of Mexican cattle tightened supplies further, as Washington seeks to keep out New World screwworm, a flesh-eating parasite.

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The firms exiting the so-called Amazon Soy Moratorium, which has saved millions of acres of tropical forest over nearly two decades, are looking to shield themselves from a new state law in Mato Grosso, the sources said on condition of anonymity.

Starting in January, the state will strip tax incentives from companies taking part in the conservation program. Mato Grosso grew some 51 million metric tons of soybeans in 2025, more than Argentina.

A preliminary report from state auditors in April found that grains traders had benefited from tax incentives worth about 4.7 billion reais (C$1.15 billion) between 2019 and 2024.

ADM and Bunge were the top beneficiaries of tax incentives, receiving about 1.5 billion reais (C$368.6 million) each, said Sergio Ricardo, head of the Mato Grosso state audit court.

U.S.-based ADM, Bunge and Cargill, as well as China’s Cofco and Brazil’s Amaggi, are signatories of the pact with facilities in Mato Grosso that have benefited from state tax incentives. It was not clear which of the firms would break immediately from the moratorium.

Cargill referred questions to industry group Abiove, which did not respond to requests for comment. ADM, Bunge, Cofco, Amaggi and grain exporter group Anec did not respond to questions.

“Most companies will choose not to lose the tax incentives and will withdraw from the agreement,” said one of the sources, adding that the departures would effectively end a pact signed in 2006 with the federal government and conservation groups.

‘Dangerous precedent’

The moratorium is considered one of the most important forces slowing deforestation rates in the Brazilian Amazon over the past two decades as it bars signatories from buying soybeans from farmers who plant on land deforested after July 2008.

Researchers estimate that an area of the rainforest the size of Ireland would have been lost to soy farms in Brazil without the moratorium and related conservation efforts, compared to the pace of expansion in neighboring countries such as Bolivia.

The Mato Grosso law, which lawmakers passed in 2023, is the latest example of a global retreat from pacts and policies to curb climate change, even as temperatures break records, driven by rising fossil fuel use and deforestation.

Critics of the soy moratorium say that the pact restricts the market and hurts farmers. Farming groups in Mato Grosso say the protocol reduces the income and economic development of the state.

“Companies could choose to keep their zero-deforestation commitments,” said Cristiane Mazzetti, who oversees the moratorium for Greenpeace. “It’s a dangerous precedent, and it’s not what we need in a moment of climate emergency,” she added.

Brazil’s federal government has argued in court against the new Mato Grosso law stripping tax breaks from traders due to their environmental commitments.

“If the Mato Grosso government really removes those incentives, we have heard that some, or many, companies will in fact abandon the moratorium for economic reasons,” said Andre Lima, a senior Environment Ministry official tasked with combating deforestation. He added that firms had not officially informed the ministry of their plans.

Far-reaching consequences

President Luiz Inacio Lula da Silva has vowed an “ecological transformation” of the Brazilian economy, capped off with the United Nations climate summit hosted in the Amazon last month.

But in domestic politics, his leftist government is often fighting a rearguard battle to protect the world’s largest rainforest from a farm lobby with the upper hand in Congress.

The unraveling of the Amazon Soy Moratorium is likely to embolden those rural powerbrokers and their allies. This year the farm lobby has successfully gutted environmental permitting laws and stripped some protections from Indigenous lands.

The trend has caught the attention of farmer groups in Europe arguing to block a free trade agreement between the European Union and South America’s Mercosur due to the impact of Brazilian agribusiness on vital ecosystems.

Brazil’s Supreme Court has barred some but not all of the farm lobby’s agenda in Congress, based on constitutional protections for the environment and Indigenous peoples.

Environmentalists warn that the end of the soy moratorium could pave the way to dismantle other environmental protections in the world’s largest soybean producer, including part of Brazil’s forestry code restricting farmers from felling trees on 80 per cent of their properties in the Amazon.

Lawsuits

In recent years, soybean farmers pushed state lawmakers in Mato Grosso, Rondonia and Maranhao to strip tax benefits from companies taking part in environmental pacts more restrictive than Brazilian law.

It remains unclear which environmental commitments outside the soy moratorium will trigger those new state laws, which could threaten a range of other companies, including cellulose producers and meatpackers.

Brazilian antitrust agency CADE has separately opened an investigation of the soy moratorium for a potential breach of competition rules. For nearly two decades, trading firms have shared the cost of monitoring soy farms in the Amazon to avoid buying from those planting on newly deforested land.

Starting in January, CADE has ordered traders “to refrain from collecting, storing, sharing, or disseminating commercial information related to the sale, production, or acquisition of soybeans.”

Soy farmers in Mato Grosso have also sued grain traders for roughly $180 million over their role in the pact.

In temporary rulings, Supreme Court Justice Flavio Dino stopped the antitrust investigation, but let the Mato Grosso law take effect. Environmental groups are still trying to block the state law ahead of a final court ruling on the issue.

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The preliminary class action settlements were filed on Monday in federal court in Minnesota and require a judge’s approval.

Tyson, the largest U.S. meat company, will pay $55 million. Cargill agreed to pay $32.5 million. The proposed accords are the first for consumers in the price-fixing litigation, which began in 2019.

Attorneys for the plaintiffs have estimated there are about 36 million potential class members in 26 states and the District of Columbia.

Tyson, based in Arkansas, and Minnesota-based Cargill agreed to cooperate with the consumers as they pursue price-fixing claims against the remaining defendants, JBS USA and National Beef Packing.

Tyson and Cargill did not immediately respond to requests for comment, and neither did JBS and National Beef. The defendants have all denied any wrongdoing.

Lead attorneys for the consumers on Monday declined to comment.

Eligible class members are individuals who indirectly purchased beef products — such as chuck, loin and ribs — between August 2014 and December 2019 from stores such as Walmart and Costco. The retailers are not named as defendants.

An expert for the plaintiffs said he estimates total damages to the consumer class at $1.9 billion.

The plaintiffs’ lawyers said they have spent tens of thousands of hours pursuing the lawsuit. They said they will ask the court to award them up to 33.3 per cent of the settlement, or $29 million, in legal fees.

Tyson last week agreed to pay $85 million to settle a lawsuit by consumers who accused it of conspiring with rivals to inflate pork prices. Tyson denied wrongdoing in that case.

Earlier this year, JBS reached a $83.5 million settlement resolving price-fixing claims from ranchers and other plaintiffs, but not consumers. JBS has denied any wrongdoing.

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Agricultural merchants including privately held Cargill are under pressure as prices of the commodity crops they trade, such as wheat, corn and soybeans, have dropped to near four-year lows and crop processing margins have shrunk.

Most of Cargill’s job reductions would take place this year, the company’s president and CEO, Brian Sikes, said in a memo reviewed by Reuters on Tuesday.

“They will focus on streamlining our organisational structure by removing layers, expanding the scope and responsibilities of our managers, and reducing duplication of work,” Sikes said in the memo.

The move is part of a shift in strategy at the nearly 160-year-old company, Cargill said, when asked about the memo.

“Unfortunately, that means reducing our global workforce by approximately five per cent,” it said.

Minnesota-based Cargill has more than 160,000 employees, which implies that a five per cent cut in staff would hit about 8,000 jobs.

Unlisted Cargill reported revenue of $160 billion for its 2024 fiscal year that ended in May, down from a record $177 billion in the previous year.

Cargill does not release quarterly earnings statements, but in a memo seen by Reuters in August, it said less than one-third of its businesses met their earnings goals in the last fiscal year.

“Impacts to our operations and frontline teams will be kept to a minimum as we empower them to continue delivering for our customers,” Sikes said in the memo.

The move comes after Cargill said in August it would undergo structural changes after missing internal earnings goals, with plans to streamline operations into three units from five as part of its 2030 strategy, Reuters reported in August.

Sikes said the company will hold a meeting on Dec. 9 to share more information about the restructuring.

“This week, for those in countries where we can immediately communicate to employees whose roles are impacted, we’ll set up meetings to explain next steps,” he said.

Bloomberg News reported Cargill’s job cut plan earlier.

Cargill’s restructuring comes as its competitor Archer-Daniels-Midland faces its own challenges after discovering accounting irregularities and at the same time battling weaker earnings.

Meanwhile, after months of tackling competition regulators including in Canada and China, U.S. grains trader Bunge Global said in October it expects to complete its takeover of Glencore-backed Viterra by early 2025.

Cargill to terminate about 475 employees in Minnesota

Chicago | Reuters – Global trading house Cargill plans to permanently terminate about 475 employees in Minnesota, home to its corporate headquarters, starting on Feb. 5, according to a company letter released by the state on Tuesday.

Cargill has said it plans to cut around five per cent of its staff after revenue slumped in its most recent fiscal year as crop prices hit multi-year lows.

The company is informing Minnesota employees about layoffs this week, and they are eligible for severance pay and outplacement services, Cargill said in a letter to the Minnesota Department of Employment and Economic Development.

The employees work at an office center in Wayzata or are “tagged” to the facility but live elsewhere, according to the letter, which added that they are not represented by a union.

“Cargill is undergoing a business restructuring that is resulting in a reduction in force of certain roles at the Wayzata Office Center,” the letter said.

Agricultural merchants, including privately held Cargill, are under pressure as prices of the commodity crops they trade, such as wheat, corn and soybeans, have dropped to near four-year lows and crop processing margins have shrunk.

Cargill has more than 160,000 employees, which implies that a five per cent cut in staff would hit about 8,000 jobs.

The company reported revenue of $160 billion for its 2024 fiscal year that ended in May, down from a record $177 billion in the previous year.

Cargill does not release quarterly earnings statements, but in a memo seen by Reuters in August, it said less than one-third of its businesses met their earnings goals in the last fiscal year.

– Above reporting by Tom Polansek

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Nearly 1,000 unionized employees at Cargill Dunlop in Guelph ratified a new collective agreement on Saturday July 6. The workers, represented by Local 175 of the United Food & Commercial Workers (UFCW), began strike action after turning down a deal on May 26.

The UFCW said in a release the new agreement includes:

• Wage increases totalling $3.75 per hour over the course of the agreement, which includes $2 per hour in the first year. That $2 will be paid retroactive for all hours worked, including overtime, since January 1, 2024. In addition, members receive a contract renewal incentive payment in the form of a $500 lump sum.
• Dental coverage improves to $2,000 per year, and members also benefit from the removal of lifetime caps on a number of dental services.
• Short Term Disability (STD) now has a maximum of 70 per cent and will provide up to $143 more per week. This means members can receive up to $668 per week while on STD leave.
• Bereavement leave entitlement for members will now be five days, up from four, for the death of a spouse, child, or parent.

The Beef Farmers of Ontario (BFO) said in a statement it is relieved to hear that an agreement has been reached between Cargill Guelph and Union officials. “We will continue to monitor as the facility reopens and returns to normal operation,” the BFO said.

Cargill’s Guelph facility processes approximately 75 per cent of the cattle in Ontario and plays a significant role in the Ontario beef supply chain. The Cargill Guelph Dunlop facility fills 67 per cent of the federally inspected processing capacity in eastern Canada, according to the BFO.

—Updated to say workers return to work today.

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Beef Farmers of Ontario said on X that it is “encouraged by positive contract discussions at the Cargill, Guelph plant”.

Almost 1,000 members of United Food and Commercial Workers Local 175 went on strike on May 27.

The strike has been stressful for beef farmers as beef cattle have had to be marketed further afield.

Governments recently announced measures to help beef farmers manage the situation.

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Yesterday the meat processor said it was working with structural engineers to stabilize the roof and implement contingency plans to resume operations as soon as possible, according to an emailed statement.

One of four major U.S. beef processors, Cargill is using its broad supply chain to minimize disruptions to customers and livestock producers, according to an emailed statement. It said the Kansas plant resumed operations on Tuesday on its fabrication floor, where meat is cut into pieces.

—Reporting for Reuters by Tom Polansek

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The statement noted the beef sector in Canada relies on a resilient processing industry across the country and the impacts of this strike are significantly impacting beef producers in eastern Canada.

“Canadian beef producers rely on a strong and stable supply chain to get beef to Canadians and our global customers as efficiently as possible. While we fully respect and support the collective bargaining process, we cannot turn a blind eye on the effect this stalemate is having on our beef industry,” commented CCA President Nathan Phinney. “Both sides are urged to expedite their negotiations to find a solution as soon as possible.”

The statement added having a processing facility in Guelph is key for eastern Canadian beef producers and supports a number of regional brands and programs. To date, there has been no indication of upcoming talks or negotiations that would see an end to the strike that began on May 27.

“The challenges that come with the loss of eastern Canada’s largest beef processor cannot be understated,” said BFO President Craig McLaughlin.

“Ontario is the second largest cattle feeding province in the country, and our members rely on the important work of our processing partners and their role in getting beef on the plates of consumers here in Ontario and around the world. With each passing day, the consequences of the Cargill Dunlop labour strike continue to mount for our feedlot sector, beef supply chain partners, and our farmers’ ability to cash flow their operations. BFO urges both sides to work toward an immediate resolution of this dispute,” he added.

Ontario beef farmers have been mitigating the impact of supply chain challenges by sourcing alternative facilities in Canada and the United States to process their cattle or keeping animals on farm for a longer period of time. The statement said both options present unique challenges and additional costs. The Canadian beef sector has growing concerns about the sustainability of these efforts and effects on the industry as the strike enters its fifth week.

“NCFA urges both parties to negotiate a swift resolution,” said NCFA Board Chair Will Lowe. “Cargill Guelph is the major plant supporting Canada’s largest fed-cattle region in the country after Alberta. This disruption is difficult for beef producers who are already facing multiple other challenges.”

Cargill Guelph processes approximately 75 per cent of the cattle in Ontario and plays a significant role in the Ontario beef supply chain. The Cargill Guelph Dunlop facility fills 67 per cent of the federally inspected processing capacity in eastern Canada.

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Strike votes were held on June 5-6.

“We had 84 per cent of the plant come out, so 341 of the people came out to vote on the strike ballot,” said Chris O’Halloran, executive director of United Food and Commercial Workers Local 401, which represents workers at the plant.

Results, however, have not yet been released. Cargill is objecting to votes cast by people on parental leave or those receiving benefits from the Worker’s Compensation Board, the union has said.

As a result, ballots remained sealed going into the weekend June 7.

Those objections covered about 34 eligible voters, the union said.

“The union feels it’s discriminatory to say somebody who is on maternity leave should not have the right to vote and participate in their contract negotiations,” said O’Halloran.

The labour board will now rule on whether those contested ballots should be opened and counted. That decision will be brought forward at a June 12 meeting.

The Cargill Case Ready plant produces counter ready meat. The meat comes from the Cargill beef processing plant in High River, Alta., and is cut, weighed and bagged at the Cargill Case Ready plant.

Worker issues include pay, lack of guaranteed hours and overtime, the union has said.

Ontario strike

A strike at the Cargill Dunlop Drive facility in Guelph is nearing the two-week mark. Nearly 1,000 workers at the beef processing plant went on strike at the end of May. The plant processes nearly 80 per cent of Ontario’s cattle.

Craig McLaughlin of the Beef Farmers of Ontario said everyone in that province is already feeling the impact, but feedlots are using other outlets to slaughter market ready animals.

The union workers at the Cargill Dunlop Drive facility have been without a contract since the beginning of 2024.

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“I think the possibility of a strike at the Cargill Case Ready plant is very, very real,” said Chris O’Halloran, executive director of the United Food and Commercial Workers Union Local 401 that represents workers at the Calgary plant.

Strike votes were set for June 5-6.

O’Halloran said the workers have three main issues they want to resolve, among them guaranteed hours to help with the increased cost of living.

“There’s also issues that sort of come around overtime, where people get called in for seven straight days and don’t receive any overtime because they’re not guaranteed enough hours on the other days,” he said.

The union argues that workers aren’t benefitting from processor profits.

The Cargill Case Ready plant prepares counter-ready meat. It comes from the Cargill beef processing plant in High River, after which Calgary workers cut, weigh and bag it. Product is shipped and distributed the same day.

This counter-ready meat is often sold at discount stores like FreshCo or No Frills that don’t have meat cutters.

Labourers at Cargill echo the same concerns as ranchers who say meat processors get a disproportionate share of the profit pie, O’Halloran said.

“That’s the real struggle. The system seems to be stacked against the ranchers, the workers and all the people who are putting everything together.”

Ontario strike

Union workers in Guelph claim similar issues. The United Food and Commercial Workers Local 175 said the Cargill Dunlop Drive facility has failed to offer wages that keep up with the cost of living, which is the main motivation for the strike.

According to Guelph Today, the company and the union reached a recommended settlement that provided an increase every year for four years. But 82 per cent of union members rejected the negotiated settlement during a vote on May 26.

“Cargill is our main processing plant,” said Craig McLaughlin, president of the Beef Farmers of Ontario.

The plant handles 80 per cent of the Ontario volume. There is another large federal plant in the province, and numerous provincial plants, although they cannot ship out of the country or to other provinces.

David Hultin, communications lead for the Manitoba Beef Producers, said Manitoba ranchers could be affected by the Guelph strike.

“We are hopeful the negotiations between both parties will come to a swift resolution,” he wrote in an email.

Demand for beef increases in the summer months.

“If the temporary closure of the facility is short-lived, we expect the impact on consumers to be minimal as retailers will be working through their current and pre-ordered beef supplies,” Hultin said.

If the Guelph facility is closed for an extended period, producers will need to look elsewhere, which could mean shipping more cattle to Alberta or to the United States.

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