Arkansas-based Tyson Foods says it’s permanently closing its Perry pork packing plant, a move that will leave the 1,276 workers at the city’s largest employer without jobs.
“After careful consideration, we have made the difficult decision to permanently close our Perry, Iowa, pork facility,” a company spokesman said in an email Monday.
Tyson said it will encourage employees to apply for other positions within the company. Tyson said it still employs 9,000 people in Iowa, and it has pork facilities in Waterloo, Storm Lake and Columbus Junction.
It’s the second big blow this year to Perry, a town of about 7,930 residents that already was struggling with a January school shooting that left three dead and injured six others.
“It’s our economic base,” said Mayor Dirk Cavanaugh, adding that it’s unlikely that any other plants Perry workers would move to would be close enough for them to remain in the community.
Cavanaugh said company officials told him the closure will come in late June.
While not all Tyson workers live in Perry, they still buy groceries, gas and other services there, he said. “It’s a large percentage of our community,” he said, adding that he plans to work with local, state and company leaders to find a new employer to use the plant space.
Gov. Kim Reynolds said Monday in a statement that “Tyson employees, the Perry community, and Iowa pork producers will have the full support of the state in the months leading up to the plant closure and after.”
The Iowa Economic Development Authority and Iowa Workforce Development are “already engaged,” Reynolds said. “We stand ready to assist impacted employees with finding new jobs in the area as soon as possible,” with about 60,000 job openings posted on IowaWorks.gov.
The United Food and Commercial Workers union Local 1149 represents between 700 and 800 of the plant’s employees.
“We feel that Tyson owes that community (Perry) and the employees some kind of compensation, some kind of training, some kind of benefit for a lot of those families,” said the union’s president, Roger Kail.
“We’re definitely going to be asking for some kind of compensation for these people. We’re going to try and get as much as we can get for these people, because they deserve it,” Kail said.
He said the union would help as many people as it can to find other jobs, but the openings in other packing plants are starting to tighten up.
Workers coming off shift left the Tyson plant Monday afternoon holding their lunch bags and walking with their heads down.
“They told us in a meeting they were closing down the business,” Jaime Morales, a worker who has been with the company for more than three years, told the Register in Spanish.
Talks about the plant closing had been spreading among workers but there wasn’t an official announcement from the company until Monday, Morales said. “There’s nothing you really can do besides look for another job,” he said.
Closure announcement follows tough year for pork industry
The move comes after the pork industry has encountered staggering losses over the past year.
“I’m disappointed but not surprised,” given the grim economic conditions pork producers are struggling with, said Pat McGonegle, CEO of the Iowa Pork Producers Association.
The Perry facility slaughtered and processed about 9,000 hogs each day, and Iowa producers who sold to that plant now will need to seek out others. “Typically, the cost of that transition has been borne by producers,” McGonegle said.
“The economic times in our industry are very difficult right now,” he said.
Last year was the worst financial downturn in a quarter century for Iowa and U.S. pork producers, with rising costs outstripping prices farmers received for their livestock, experts have said.
Pork producer losses averaged $32 per hog last year, Lee Schulz, an Iowa State University economist, said last month. Losses are forecast to shrink to $18 per head this year, he said.
“You could say there’s a little bit of sunshine this year,” McGonegle said, adding that he hopes no other Iowa pork plants closes.
Steve Meyer, chief livestock economist at Ever.Ag, a Texas-based agricultural technology, risk management and market analysis company, said the “packer market has been good since mid-last year.”
“We’re going to have plenty of hogs and we’ll need all the space that’s left out there,” Meyer said.
He said Tyson likely targeted the Perry plant because its size and age made it difficult to add a second shift, which limits operation efficiency.
“I think that is probably the big driver” of Tyson’s decision to close it, he said.
Tyson has been experiencing headwinds since last year, when it closed chicken processing plants in Jacksonville, Florida; Columbia, South Carolina; Van Buren and North Little Rock, Arkansas; Glen Allen, Virginia; Corydon, Indiana; and Dexter and Noel, Missouri.
Tyson said it understands “the impact of this decision on our team members” and the Perry community. “We are also working closely with state and local officials to provide additional resources to those who are impacted,” the company said.
“While this decision was not easy, it emphasizes our focus to optimize the efficiency of our operations to best serve our customers,” the spokesman said.
Closure announcement not the first for Perry plant
In 2018, Tyson won $674,000 in state incentives as it made a $44 million upgrade to the plant. The Iowa Economic Development Authority said Monday no incentives ultimately were released for the project.
Cavanaugh said he had hoped the expansion would help keep the plant operating in Perry. He said the community has been in a similar spot before, experiencing ups and downs with the industry for decades.
After a meatpacking plant closed in Perry in the mid-1950s, the Iowa Pork Co. organized to build a new plant on the now-Tyson site in 1962, and it quickly became Perry’s largest employer, according to a history by Perry Economic Development.
Perry Economic Development said Oscar Mayer Inc. bought the plant in 1965. On Christmas Eve 1988, just as Oscar Mayer was preparing to close the plant, it announced that it would instead sell it to IBP Inc., and that it would remain in operation. Tyson took over IBP in 2001.
More:Iowa Poll: After Perry High shooting, most Iowans favor letting teachers have guns in school
Staff writer Jose Mendiola contributed to this article.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457.
Kevin Baskins covers jobs ad the economy for the Des Moines Register. Reach him at kbaskins @registermedia.com.
