FORT MORGAN — The Cargill meatpacking plant stood eerily quiet on Wednesday, much as it has each of the past 83 days.
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On a normal day, more than 2,000 workers in this rural northeast Colorado city fill assembly lines as they carve up cattle bound for butchers and supermarkets across the United States.
But on Wednesday, these laborers — many of whom are immigrants or refugees — instead lined Main Street, holding signs that read: “The steaks are high.”
The economic engine of Fort Morgan — a beef processing plant that employs more than 20% of the town’s population — has remained largely dark since Cargill halted production in April, then locked out its unionized workforce in May amid contentious contract negotiations.
The union, Teamsters Local 455, says Cargill refuses to budge on minimal wage increases, even as the company reports staggering profits. Company representatives, meanwhile, contend that their proposal offers substantial benefits for its workers.
A lockout is an effort by bosses to block employees from working in the midst of a labor dispute. Once a rare phenomenon compared to a strike, lockouts have become a more common tool used by employers to gain leverage during negotiations.
Still, experts say, they remain exceedingly uncommon in the beef industry.
The impasse has left Cargill’s workers with no idea when — or if — they’ll be able to return to work. Fort Morgan officials, for their part, have already implemented budget cuts and frozen hiring as they brace for even steeper revenue declines, potential layoffs and a deeper existential question.
What happens to a factory town if the factory goes away?
“This is the type of thing that could be a generational event,” Fort Morgan City Manager Brent Nation said last week. “These are things that stick with a community for a long time.”
Cargill representatives declined an interview request for this story, and instead directed The Denver Post to a company webpage dedicated to the Fort Morgan negotiations.
“This was not a decision we made lightly,” the company wrote of the lockout. “Cargill remains committed to reaching an agreement through continued good-faith negotiations with the union.”
How the lockout began
Fort Morgan is an agricultural community of 11,000, about 80 miles northeast of Denver.
It’s a diverse and largely poor population, where more than half of its residents identify as Hispanic and the average person makes just $26,000.
Cargill, for many in northeast Colorado, represents the best option for making a decent living.
The company, headquartered in Minnesota, is the largest privately held corporation in America by revenue, employing more than 155,000 people across 70 countries. Its annual revenue:
Cargill, on its website, acknowledges the “vital role” the company plays in supporting the local economy, saying it “strives to be the employer of choice” in northeastern Colorado.
The facility’s massive 85-acre complex — including a dozen buildings and 630,000 square feet of production space — sits on the outskirts of town east of Main Street. The plant dates back to 1966 and was acquired by Cargill in 1987.
The current stalemate traces back to February, when the union and the company began negotiating a new contract.
The parties traded proposals, with Cargill offering an estimated $33.4 million investment in Fort Morgan employees. Year one wages, under the company’s proposal, would range from $24.20 to $32.10 per hour, depending on the job and experience. Union officials, though, said this would only equate to a $2.15-per-hour increase over five years.
Cargill also touted significant jumps since 2018 to its base pay, average wages and annual payroll.
In April, amid the heated negotiations, the company stopped bringing cattle to the facility, though workers continued to receive their pay. The following month, 90% of union workers rejected Cargill’s deal, citing inadequate wage increases and other health and safety concerns. The union, however, never held a strike vote.
On May 20, Cargill locked the plant’s doors, saying the company “cannot operate the facility safely and responsibly amid continued uncertainty of a potential work stoppage.” A sudden shutdown, company officials said, could create risks related to food safety, animal welfare and extensive food waste.
“Our goal remains to reach an agreement that allows the facility to return to normal operations safely and productively as soon as possible,” Cargill officials said.
The Teamsters say the speed at which Cargill barricaded the factory showed that they had “full intention to lock us out.”
There have been no conversations of substance since, said Chris Suazo, a Local 455 business agent, though the two sides did meet on June 30.
Cargill said it would support a meeting with a mediator, while Suazo said the union remains open to negotiating. Still, the sides remain far apart.
Lockouts, once unheard of, have in recent years represented a significant portion of work stoppages as federal courts and the National Labor Relations Board have expanded their permissible use, said Moshe Marvit, an attorney and former National Labor Relations Board employee.
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“At a time when the most well-known tools of labor organizing have already been undermined by aggressive — and too frequently unlawful — anti-union tactics by employers, this enhancement of management power is designed to weaken the bargaining power of unions, and lead to a further decline in the earnings and benefits available to hard-working families,” he said.
The dispute comes amid tumultuous times for beef producers nationwide.
The U.S. cattle herd is at a 75-year low, driving up beef prices. Cargill has said it is currently losing hundreds of millions of dollars in its beef operations.
The Fort Morgan lockout came just two months after thousands of workers at a JBS meatpacking plant in Greeley went on strike over wage disputes and unsafe working conditions. The two sides reached an agreement three weeks later.
Industry watchers say production interruptions, such as the one in Fort Morgan, are unlikely to drastically impact the U.S. beef market since facilities nationwide are already running well below capacity. That means Cargill can easily transfer cattle destined for Colorado to other plants.
“Things like this can cause regional issues, such as producers seeing increased costs and headaches, but for the industry as a whole, it’s not an end-of-the-world scenario,” said Jaime Luke, an assistant professor at Michigan State University’s Department of Agricultural, Food and Resource Economics.
In fact, Cargill’s operational costs actually go down when the company can run its plants at closer to capacity, said Jennifer Martin, an associate professor in the College of Agricultural Sciences at Colorado State University.
Workers left in limbo
Cargill workers have been left in an uneasy limbo since the lockout.
They’re still getting paid $1,250 per week from the union’s “out of work” benefit fund, though it’s not clear how long that will last.
Instead of handling cow carcasses all day, they’re picketing along Main Street and outside the plant. On Wednesday, laborers chatted in small groups, looked at their phones and milled around a downtown park.
“The company has a real next-man-up mentality,” said Michael Torres, a supervisor at the plant. “There’s a real lack of empathy for the workers.”
Even though they’re still getting paid, Torres worries about not having health insurance, which stopped June 1.
Next to him, Robert Gasca pondered his future.
He’s been with Cargill for 17 years, taking an hour-long shuttle ride every day from Greeley.
Gasca’s mother died when he was young, leading the teen to drop out of high school. He earned enough at Cargill to allow his sister to graduate — an accomplishment he considers his proudest moment.
But the job has come with a cost. Gasca showed disfigurements on his hands from operating a meat hook all day and recalled once when a knife sliced through his leg “like butter.” It’s a physically demanding, intense gig, with few breaks.
“Religiously, God told me to leave this place years ago,” he said.
Local businesses in town expressed their support for the union members, with some putting signs in the windows that proclaimed they “stand with Cargill Teamsters.”
A few business owners said sales have dropped since the lockout, while others lamented the lack of parking when workers picket downtown.
“At first, we were worried about the unknown,” said Kim Filener, who works at a women’s clothing store in town. “But everyone has been respectful and things have been pretty calm. We know Cargill is big for this town and we support our workers.”
At the end of the day, townspeople said, they just want a resolution to end the stalemate.
‘Plan for the worst’
As workers mull their fate, the city of Fort Morgan does the same.
Not only does Cargill employ a significant percentage of the population, but the company also represents the city’s largest water and electricity customer. Since the lockout, utility usage from the plant has plummeted, said Nation, the city manager.
Sales tax receipts have remained stable so far, since workers are still getting paid, but officials are worried about a hit there, too, if laborers stop getting paychecks.
Nation presented a bleak outlook to the City Council earlier this month, saying all municipal departments needed to cut 5% from their current budgets and institute an immediate hiring freeze.
The 2027 prognosis is even worse. If Cargill doesn’t come back online, the city would lose $15 million of its $100 million annual budget, Nation said. As a result, all departments next year face 15% cuts, which would likely result in layoffs.
“We need to plan for the worst in this case,” he said.
The city manager has been in close touch with officials in Lexington, Nebraska, which recently lost a Tyson Foods plant that employed 30% of its total workforce. In that case, researchers estimated the move resulted in the loss of 7,000 jobs, $3.3 billion in statewide economic impact and $2.7 million in lost sales tax revenue for the county.
Nation thinks about his father, who worked in the oil business. The family talked for decades about the oil bust in the 1980s and the economic devastation that it caused Colorado. If Cargill doesn’t reopen its Fort Morgan plant, he said, it would cause similar ripples through the community.
“Looking at the dollars and cents, the trickle-down effect is scary,” he said. “But these are the cards we’ve been dealt.”
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