JBS will permanently close a facility outside Los Angeles that prepares beef for sale at U.S. grocery stores, the world’s largest meat company said on Friday, as tight cattle supplies have raised costs for meatpackers.

JBS will shut its Swift Beef Company facility in Riverside, California, on February 2, eliminating 374 jobs, according to a notice from the state’s Employment Development Department.

Beef prices set record highs this year after ranchers slashed the U.S. cattle herd to its lowest level in decades due to a persistent drought that dried up pasture lands. A halt on U.S. imports of Mexican cattle tightened supplies further, as Washington seeks to keep out a flesh-eating parasite.

U.S. President Donald Trump has said he is working to bring down beef prices for consumers and accused meatpacking companies of driving up prices through manipulation.

Low supplies have forced meatpackers to pay more for cattle to slaughter into hamburgers and steaks.

Workers at JBS’s facility process beef for sale in grocers’ meat cases but do not slaughter cattle.

The meatpacker said the planned closure was “part of a strategic initiative to optimize its value-added and case-ready business and simplify operations across its network.”

“The company remains focused on delivering high-quality products and dependable service while strengthening its operational footprint to meet evolving market demands,” it said in a statement.

JBS will shift production for its customers to other facilities, and workers will be eligible for jobs at other plants, the statement said.

Last month, JBS executives projected its U.S. beef margins would likely tighten in the fourth quarter from the prior period due to the U.S. cattle shortage.

Rival meatpacker Tyson Foods in January will shut a major cattle slaughtering plant in Nebraska with about 3,200 employees.

—

(Reporting by Tom Polansek; Editing by Bill Berkrot)