US egg group Cal-Maine Foods has acquired a broiler processing plant from meat giant Tyson Foods.
Tyson had closed the site, which is in Dexter in Missouri. The deal, agreed for an undisclosed sum, will also see a hatchery and feed mill at the same location change hands, Cal-Maine said.
The company plans to convert the broiler processing plant to an egg grading facility. Cal-Maine indicated it expects to contact some of the farmers that had supplied the Tyson plant to see if they will switch to supplying eggs.
“This transaction is consistent with our growth strategy to expand our business through selective acquisitions in addition to our organic growth initiatives,” Cal-Maine president and CEO Sherman Miller said. “The Dexter location offers an important opportunity to expand our geographic footprint and enhance our ability to serve our valued customers with added production and distribution capabilities in Missouri and surrounding markets.”
The deal closed a difficult December for Cal-Maine. The company temporarily ceased production at a facility in Kansas following an outbreak of avian influenza at the site. Earlier in the month, a US jury ordered egg producers, including Cal-Maine, to pay $17.7m in damages to a number of food manufacturing companies after being found guilty in a long-running price-gouging lawsuit. Under federal law, that amount was tripled to around $53m.
The Dexter site, meanwhile, was among a clutch of facilities Tyson said last year it would close in a bid to reduce costs against a backdrop of slowing demand and plummeting profits.
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By GlobalData
The plant was one of four domestic chicken facilities Tyson said in August it would close during the first half of its 2024 fiscal year.
Tyson’s streamlining did not stop there. In November, Tyson set out plans to shut down two of its case-ready meat production facilities.
And in March Tyson closed two poultry plants in Virginia and Arkansas, which, combined, employed over 1,600 people.
In the year to the end of September, Tyson posted a $649m loss, compared to a $3.25bn profit the year previous. Sales stood at $52.88bn, versus $53.28bn the year before.
