Smithfield Foods to close down California and Arizona plants next year due to rising costs

US – Smithfield Foods, an American pork producer and food-processing company, has announced that it is exploring ways to close down its California and Arizona plants next year, citing the escalating cost of doing business in the states.

Jim Monroe, vice president of corporate affairs said operating costs in California are much higher than in other areas of the country, including taxes and the price of water, electricity, and natural gas.

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“Our utility costs in California are three and half times higher per head than our other locations where they do the same type of work,” he added.

In addition, Monroe stated that the shutdown is not expected to reduce supply or increase costs on products, and Farmer John Products will still be sold in California and there won’t be any impact on our customers.

Smithfield is planning to service customers in California with its Farmer John brand and other brands and products from existing facilities in the Midwest.

The Farmer John meat-packing plant in Vernon will shut down in February after the company reached an agreement this week with the United Food and Commercial Workers International Union, the International Brotherhood of Teamsters, and the International Union of Operating Engineers.

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Its 1,800 employees will receive severance and job placement support along with bonuses for those who choose to stay on the job until the closure, according to the company.

“We are grateful to our team members in the Western region for their dedication and invaluable contributions to our mission. We are committed to providing financial and other transition assistance to employees impacted by this difficult decision,” said Smithfield Chief Operating Officer Brady Stew

The company said some operations will be moved to other facilities in the Midwest, but the overall reduction in processing capacity is prompting Smithfield to reduce its sow herd in Utah.

The Vernon plant has been the target of repeated protests by animal rights activists over its treatment of hogs. It also was hard-hit during the COVID-19 pandemic, with some 300 employees exposed to infections in 2020 and several of them being hospitalized.

California’s Division of Occupational Safety and Health fined Smithfield Foods about US$60,000 for safety violations that exposed workers to infection.

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Smithfield Food which was founded in 1936 and later acquired in 2013 by Hong Kong-based WH Group, provides more than 40,000 jobs in the United States, according to the company.

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