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JBS begins acquisition of Arizona feedlot

Published on 17 August 2010

Brazil-based JBS Swift, the world’s largest beef producer, announced plans in early July to acquire the McElhaney Cattle Co. feedyard of Welton, Arizona. McElhaney has a one-time capacity for 130,000 head of cattle, according to a company press release.

The acquisition would be completed through JBS USA and its subsidiary Five Rivers Cattle Feeding LLC, the largest cattle feeding operation in the U.S. The Five Rivers purchase, which included 10 feedlots with an annual capacity of 1.5 million head of cattle, was made from Smithfield Foods in 2008.

JBS already owns a production facility in Tolleson, Arizona, about 145 miles from the McElhaney facility.

The purchase is estimated at a cost of $24 million, according to JBS.

“We are very pleased with the proposed acquisition of this state-of- the-art installation through which we can liaise with local producers and ranchers to provide feed service for their cattle and customize the animal diet to suit the needs of our many customers not only in the U.S. but around the world. … We are strong believers in the U.S. livestock community and we will continue our efforts to bring efficiencies to the sector for the benefit of all,” says JBS CEO Wesley Batista.

The buyout is conditional upon federal regulatory approval.

McElhaney Cattle Co. originated in Tempe, Arizona, before moving to Wellton in 1947, and is currently owned by Gary Oden, according to the Yuma Sun.

The proposed deal quickly earned criticism from R-CALF USA, which petitioned the U.S. Department of Justice to block the deal. The group said the acquisition would have heavier economic consequences for independent producers, due to the sheer size of the Five Rivers line.

The organization issued similar warnings and opposition to JBS’ purchase of Smithfield, and the company’s attempted buyout of National Beef Packing Co. in 2008.  end_mark

Staff report

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