Brawley Beef May Be Bought

National Beef Packing Co. said Friday that it had entered a nonbinding agreement to buy Brawley Beef, a big feedlot and packinghouse operator in Imperial County.

The purchase -- which comes at a difficult time for the industry -- would expand the operations of National Beef, the fourth-largest U.S. beef producer, to the West Coast.

Brawley is a producer cooperative in California and Arizona that slaughters about 400,000 head a year at a plant it opened five years ago in Brawley.

Jay Nielsen, chief financial officer of Kansas City, Mo.-based National Beef, said the company might take eight weeks to look at Brawley’s operations before making a final offer.

The purchase would boost National Beef’s share of the U.S. fed-beef supply to 13% from 12% if the company can find sufficient cattle supplies to run the Brawley plant near full capacity, Nielsen said. National Beef has plants in Kansas that can process about 13,000 animals a day, according to Cattle Buyers Weekly, an industry magazine.

“Given the poor returns of the packing industry over the past six months, Brawley may be cash poor, whereas their relatively new plant looks pretty good to a competitor,” said Dan Vaught, a cattle analyst with A.G. Edwards & Sons in St. Louis.

U.S. beef processors have been losing money during the last year as cattle supplies dwindled after the nation’s calf births fell to a 45-year low in 2004 and exports declined because of mad-cow disease.