In a surprise move to the citizens of Sioux City, IA, and pork industry analysts, Smithfield Foods has announced that it will permanently shutter the John Morrell & Co. hog processing and fresh meat fabrication plant effective April 20, 2010.
“We deeply regret having to close this facility,” says Joseph B. Sebring, president of John Morrell. “We recognize that layoffs and plant closings are difficult for everyone concerned. But at the same time, we believe this is a necessary business decision. The Sioux City plant is one of the oldest, most outdated and least efficient plants in the Smithfield system,” he continues.
There are approximately 1,450 hourly and salaried employees at the Sioux City plant that will be affected by the closure.
Three other Smithfield plants at Sioux Falls, SD; Denison, IA; and Crete, NE, have the capacity to partially absorb the number of hogs currently being processed at the Sioux City plant, according to Smithfield.
The company says the Sioux City plant, built in 1959, would have to undergo “significant capital expenditures to outfit it with the next generation of pork processing technology, and in this adverse business environment, those capital needs simply cannot be met.” The plant currently slaughters 14,000 hogs a day.
Market analyst Steve Meyer, president of Paragon Economics at Adel, IA, says he expects there will be a negligible price impact from the plant closing in the short term. But he suggested producers will need to continue reducing the national sow herd to keep hog supplies in line.