Grain costs force Butterball facility closure

Butterball, the largest producer of turkey products in the United States, is to close its Longmont, Colorado facility, effective December 31, citing increased grain and other input costs as a reason, along with needs to streamline operations.

“The decision to close a facility is one of the most difficult decisions a company can make. After long and careful consideration, amid record high ingredient costs, our company has come to the conclusion that we must take these steps in order to improve our overall effectiveness.” said Rod Brenneman, president and chief executive officer of Butterball. “With this country’s current economic situation, it is all the more difficult. However, government ethanol subsidies and record high fuel prices for much of 2010 and 2011 contributed to a major increase in our operating costs and the closure of this facility is necessary to streamline our operations and accommodate current and projected demands.”

Over the past five years, Butterball’s increase in costs related to higher feed ingredient commodity markets (corn, soybean meal, fat, etc.) has averaged nearly $65 million per year, or $325 million total.

Source: Butterball