Largest Pork Company in U.S. Shuts Down California Plant, Citing High Food Costs

Smithfield Foods Inc., the largest pork processor in the U.S. by volume, will shut down its Vernon, California plant.

The company will also scale back operations in California, Utah, and Arizona.

Smithfield “will cease all harvest and processing operations in Vernon, California in early 2023 and, at the same time, align its hog production system by reducing its sow herd in its Western region,” the company said in a Friday news release.

“Smithfield is taking these steps due to the escalating cost of doing business in California,” the company said.

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The company’s news release stated:

Smithfield is providing transition assistance to all impacted employees, including relocation options to other company facilities and farms as well as retention incentives to ensure business continuity until early next year. 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 as part of its plan to close the Vernon facility.

“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 Stewart.

Smithfield provides more than 40,000 American jobs at 46 facilities and nearly 500 company-owned farms.

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ABC News reported:

Monroe 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.

“Our utility costs in California are 3 1/2 times higher per head than our other locations where they do the same type of work,” he said.

The shutdown is not expected to reduce supply or increase costs on products, and Farmer John Products will still be sold in California, Monroe said.

“There won’t be any impact on our customers,” he said.