Smithfield Foods meatpacking plant in Vernon closes, and company cites ‘escalating costs’ and regulations demands as basis for relocation decision.
Last summer I wrote that at the start of 2022, California would enforce the Farm Animal Confinement Proposition (Prop 12), approved by voters in 2018 and requires more space for breeding pigs, egg-laying chickens, and veal calves.
I predicted that the state’s move would make many products, including bacon, more expensive and harder to obtain.
The move also appears to have killed the golden pig of pork production, as the largest pork processor in the country is closing its operation in Vernon, CA.
Smithfield Foods Inc., the largest pork processor in the U.S. by volume, is closing an 1,800-person plant in California and shrinking the size of its hog herd in the region, saying the cost of doing business in the state wasn’t worth it.
Smithfield, owned by Hong Kong-based pork conglomerate WH Group Ltd., 288 0.00%▲ said Friday that it would close the plant in Vernon, Calif., just outside of Los Angeles, in early 2023, citing higher taxes, utility costs and labor costs in the state compared with other areas where it operates.
…Smithfield also said part of the reason it closed the facility was the regulatory environment in the state. Specifically, a state law passed by voters in 2018 and backed by the Humane Society, called Proposition 12. It requires breeding pigs, or sows, to be able to lie down and turn around in spaces in which they are housed, essentially outlawing pork produced using small gestation stalls in most circumstances.
Pork producers and suppliers have resisted, saying such moves would raise meat prices by causing farmers to spend millions of dollars changing their operations, create supply-chain chaos and risk their pigs’ health.
When one state senator used profanity directed at Tesla CEO Elon Musk, the billionaire tech giant moved his headquarters to Texas. So, when California voters chose to go all-in with the animal activists rather than fully considering the realities of meat production, it should not surprise anyone that the executives of these firms are also relocating their facilities.
Additionally, the Vernon plant was a target of many rabid activists…both in and out of government.
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. Several were hospitalized.
California´s Division of Occupational Safety and Health fined Smithfield Foods about $60,000 for safety violations that exposed workers to infection.
There are other disturbing developments related to pork production too. Due to the increasing costs of feed (elated by the rising prices of fertilizer and fuel), swine herds are being reduced.
The supply of hogs in the U.S. also isn’t expected to grow soon as higher feed, labor and material costs have weighed on pig farmers, making it too expensive for them to expand, said Lee Schulz, a livestock economist at Iowa State University. For processors, if the supply of hogs isn’t increasing, it makes sense to cut high-cost plants that might not even be running at capacity, he said.
Smithfield plans to decrease its sow herd in Utah and is exploring strategic options to exit its farms in Arizona and California.
Smithfield Foods was the largest employer in Vernon.
The company said it’s providing transition assistance to all impacted employees, including relocation options to other company facilities and farms as well as retention incentives.
“We hope that another operator will take advantage of the highly trained and stable workforce that makes the Farmer John plant a productive and profitable part of Vernon’s packing infrastructure,” said Grant.
Sources tell ABC7 between 1,800 and 2,500 employees are set to be laid off.
Between food scarcity and inflation, Californians are likely under challenging times. However, in this case, they have contributed directly to this problem. I fear they will soon learn that the taste of moral superiority can be very bitter.DONATE
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