Citing costs and restrictions making the U.S. feed market uncompetitive, the Canadian wing of U.S. agrifood giant Cargill plans to stop production at a southwestern Ontario feed plant.
Winnipeg-based Cargill Ltd. announced Tuesday it will “cease” operations at its animal feed production mill at Arkona, Ont., about 55 km west of London, in June 2009, and serve its U.S. customers through a “new partnership” to be announced soon in nearby Michigan.
The Ontario feed volume produced at Arkona will be “transitioned” to Cargill’s regional feed plants at Woodstock, Palmerston and Strathroy, Ont., the company said.
The economics of grain flow and transportation costs, combined with a stronger Canadian dollar and the “burdensome” permitting process for feed, “significantly” reduced the competitiveness of the Arkona plant for shipping feed into the U.S.
“Unfortunately, our milling activities for feed exports to the U.S. are no longer sustainable,” said Charles Lapointe, Cargill Animal Nutrition’s general manager for Eastern Canada. “We have no choice but to discontinue feed manufacturing at our Arkona facility, as it was primarily dedicated to U.S. customers.”
The Arkona mill’s 14 staff will be laid off, but Cargill said it would seek to place them in other facilities, such as its Strathroy pet food, horse feed and mineral premix facility, at which the company recently expanded production capacity.