Arkansas-based Tyson Foods says it will permanently close its Perry pork packing plant, a move that will leave 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 spokesperson 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 has pork facilities in Waterloo, Storm Lake and Columbus Junction.
It is the second major blow this year to Perry, a city of about 7,930 people that was already reeling from a school shooting last January that killed three people and wounded six others.
“It's our economic base,” Mayor Dirk Kavanaugh said, adding that it's unlikely any other factories Perry's workers will move to will be close enough to remain in the community.
Kavanaugh said company officials told him the closing would come in late June.
Although not all of the 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 and state leaders and businesses to find a new employer to use the factory space.
“Tyson employees, the Perry community and Iowa pork producers will have the full support of the state in the months before and after the plant closes,” Gov. Kim Reynolds said Monday in a statement.
The Iowa Economic Development Authority and the Iowa Workforce Development Authority are “already engaged,” Reynolds said. “We stand ready to help affected employees find new jobs in the region as soon as possible,” with about 60,000 job vacancies posted on IowaWorks.gov.
The United Food and Commercial Workers Local 1149 union represents between 700 and 800 of the plant's employees.
“We feel like Tyson owes this (Perry) community and the employees some type of compensation, some type of training, some type of benefit for a lot of those families,” union president Roger Kyle said.
“We will definitely seek some type of compensation for these people. We will try to get as much money as we can for these people, because they deserve it,” Kyle said.
He said the union will help as many people as possible find other jobs, but openings at other packing plants are starting to narrow.
Workers coming off a shift left the Tyson plant Monday afternoon carrying their lunch bags and walking with their heads down.
“They told us in a meeting that they were closing the business,” Jaime Morales, a worker who has been working at the company for more than three years, told the Register newspaper in Spanish.
Morales said talks about closing the plant had spread among workers, but there had been no official announcement from the company as of Monday. “There's nothing you can really do but find another job,” he said.
The closure announcement comes after a difficult year for the pork industry
The move comes after the pork industry faced staggering losses over the past year.
“I'm disappointed but not surprised,” given the bleak economic conditions facing pork producers, said Pat McGonigle, CEO of the Iowa Pork Producers Association.
The Perry facility slaughters and processes about 9,000 hogs each day, and Iowa producers who sold to that plant will now need to look for others. “Typically, the cost of this shift is borne by producers,” McGonigle said.
“Economic times in our industry are very difficult right now,” he said.
Last year was the worst financial downturn in a quarter-century for pork producers in Iowa and the United States, as rising costs outpaced the prices farmers receive for their livestock, experts said.
Pork producers' losses averaged $32 per hog last year, Iowa State University economist Lee Schulz said last month. He added that losses are expected to shrink to $18 per capita this year.
“You could say there's a little bit of sunshine this year,” McGonigle said, adding that he hopes no other pork plants in Iowa close.
“The packing market has been good since the middle of last year,” said Steve Mayer, chief livestock economist at Ever.Ag, a Texas-based agricultural technology, risk management and market analysis firm.
“We're going to have a lot of pigs and we're going to need all the space left over there,” Meyer said.
He said Tyson likely targeted the Perry plant because its size and age made it difficult to add a second shift, limiting operating efficiency.
“I think that's probably the big motivation” for Tyson's decision to close it, he said.
Tyson has been facing 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 he understands “the impact this decision will have on our team members” and the Perry community. “We are also working closely with state and local officials to provide additional resources to those impacted,” the company said.
“Although this decision was not easy, it underscores our focus on improving the efficiency of our operations to better serve our customers,” the spokesperson said.
The closure announcement is not the first for Berry Factory
In 2018, Tyson won $674,000 in government incentives as it upgraded the plant worth $44 million. No incentives were ultimately issued for the project, the Iowa Economic Development Authority said Monday.
Cavanaugh said he was hopeful the expansion would help keep the plant running in Perry. He said the community has been in a similar place before, seeing the ups and downs of the industry for decades.
After a Perry meatpacking plant closed in the mid-1950s, the Iowa Pork Co. organized the construction of a new plant at the current Tyson site in 1962, and quickly became Perry's largest employer, according to Perry's history of economic development.
Perry Economic Development said Oscar Mayer bought the plant in 1965. On Christmas Eve 1988, as Oscar Mayer prepared to close the plant, it announced 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 allowing teachers to carry guns in school
Staff writer Jose Mendiola contributed to this article.
Donnelle Eller covers agriculture, environment and energy for the Register. Accessed at [email protected] or 515-284-8457.
Kevin Baskins covers economics advertising jobs for the Des Moines Register. You can reach him at [email protected].
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