Tentative Cargill deal could end 70-day lockout in northeastern Colorado

Fort Morgan leaders say they're breathing a sigh of relief after Cargill and Teamsters Local 455 reached a tentative agreement that could end the nearly 70-day lockout at the company's beef processing facility in Colorado.

The proposed labor agreement, announced Wednesday, still must be ratified by union members, who are expected to vote early next week.

In a statement, Cargill said the company and the union reached a recommended settlement during in-person negotiations Tuesday.

"Cargill and the union met in person on Tuesday, July 28, and reached a recommended settlement for a new labor agreement at Cargill's Fort Morgan beef facility. The recommended settlement is subject to ratification by union members, with a vote expected early next week. Out of respect for employees and the ratification process, we will not discuss the proposed terms before the vote," the company said.

Fort Morgan City Manager Brent Nation said he was pleasantly surprised by the news, but is waiting until union members vote before celebrating.

"I'm relieved," he explained. "We can move forward with more of a normalized look at how the city needs to function."

Nation has previously warned that a prolonged shutdown could devastate the city's finances. Earlier this month, he estimated Fort Morgan could lose roughly $15 million in revenue if the plant remained closed into 2027, forcing the city to prepare for potential 15% budget cuts and layoffs.

Following Wednesday's announcement, that outlook has changed.

"We were planning our 2027 budget as though Cargill closed their doors in Fort Morgan," Nation said. "Today we've had several staff meetings already. We will now go back to a more normalized budgeting process for 2027."

The city still expects to take a significant financial hit this year.

Because Cargill is Fort Morgan's largest utility customer, Nation said months without normal operations will likely cost the city between $3 million and $5 million in lost water and electricity revenue.

Nation said city departments have already been instructed to find savings to help offset this year's budget shortfall, but he no longer expects layoffs to be necessary.

"We definitely had layoffs planned in 2027 if we had to hit the 15% reduction," Nation said. "At this point, I don't foresee any layoffs occurring."

The tentative agreement comes after nearly 70 days of locked-out workers and roughly 100 days without beef production at the facility, according to Nation.

As of Wednesday evening, Teamsters Local 455 has not responded to CBS Colorado's request for comment or released details of the proposed contract.

Union members are expected to vote on ratification next week.