PERRY, Iowa, (DTN) -- Tyson Foods has announced they will close its pork plant in Perry, Iowa, at the end of June, putting 1,276 employees out of work and leaving as many as 6,000 pork producers finding another source to harvest their animals.
"After careful consideration, we have made the difficult decision to permanently close our Perry, Iowa pork facility," according to a Tyson press statement. "We understand the impact this has on our team members and the local community. Taking care of our team members is our top priority and we encourage them to apply for other open roles within the company."
The statement continued, "We are also working closely with state and local officials to provide additional resources to those who are impacted. While this decision was not easy, it emphasizes our focus to optimize the efficiency of our operations to best serve our customers."
This will have a huge impact on Perry, a town of nearly 8,000 people where Tyson serves as the No. 1 employer. The company employs nearly 9,000 additional people at the state's other plants, including pork processing plants in Waterloo, Storm Lake and Columbus Junction.
Iowa Pork Producers Association CEO Pat McGonegle told DTN this is a very disappointing decision and will impact the 6,000 pork farms in the state, which markets 45 to 47 million head annually. The Perry plant kills 9,000 hogs each day.
"This will have a huge impact on the producers in the geographical area right around Perry. This has been a longstanding place to send hogs, and this will be hard on those producers," McGonegle said.
Tyson is expected to absorb the hogs sent to Perry at one of its other three pork processing facilities in Iowa. The Storm Lake plant currently kills 17,250 head per day, the Waterloo plant harvests 19,500 pigs per day and Columbus Junction does 10,350 hogs daily.
TOUGH TIMES CONTINUE FOR PORK PRODUCERS
Iowa State University Extension livestock marketing specialist Lee Schulz said 2023 and 2024 look to be the worst economically for pork producers since 1998 and 1999, but the last 90 days appear to have seen some improvement. "While 2023 was probably the worst year ever for pork producers with record high input costs, after some recovery in 2024, it looks like this year will be right at break even," he said.
The 2023 average prices for hogs were $82 per hundredweight (cwt.), Schulz expects this year's prices to average $87/cwt., which is close to break-even for the average pork producer. Currently, roughly 40% of hogs are packer-owned and only 1% to 2% of the total hogs are negotiated on the spot cash market. For some of the formula pricing, the cash price is used as a base.
While some other plants have been renovated and reopened, Schulz said he's not sure that will happen with the Perry plant since it is nearly 70 years old, but it could be sold to another company. Tyson has indicated the June 28, 2024, closing date is permanent.
In a statement, Iowa Gov. Kim Reynolds said nearly 60,000 jobs are posted on Iowa's Workforce Development website, "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. Iowa Economic Development Authority and Iowa Workforce Development are already engaged. We stand ready to assist impacted employees with new jobs in the area as soon as possible."
Jennifer Carrico can be reached at Jennifer.Carrico@dtn.com.
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