Lack of housing a serious problem for job creators in parts of Northeast Arkansas

Peco Foods, Inc. needs to hire up to 250 more workers at its Pocahontas plant and has plans for a $30 million expansion, plant manager Alan Risley told Talk Business & Politics. There’s only one problem. It’s becoming more difficult to find affordable housing in Randolph and Lawrence counties, he said.

“Finding a place to live is nearly impossible … we have people driving from Paragould, Doniphan, and other places to work,” he said. “It’s a huge problem.”

Walnut Ridge Mayor Charles Snapp told Talk Business & Politics he talks with local businesses and finding workers is a concern. A lack of housing is the primary factor. Many educated workers are forced to move to Jonesboro or Paragould to find a place to live. Lawrence County’s unemployment rate is a paltry 3.1%, and jobs are available, he said.

In the last several years, Peco, American Silica, and other job producers have set up shop in the region, but the typical housing development that follows has not occurred, he said. What the region needs is an investor or investors who want to develop real estate, said Snapp.

Custom-Pak, Inc. a Walnut Ridge-based plastic products manufacturer needs additional workers and has contemplated a multi-million dollar expansion, Snapp said, but its understaffed now and it might not be prudent to expand until the issue is resolved. The mayor is concerned Custom-Pak might decide to relocate its business elsewhere. Since he became mayor in 2014, he’s worked aggressively to attract jobs and business to Lawrence County’s seat, but now those efforts could be in peril even as the county enjoys the lowest unemployment rate it’s had in decades.

“Most rural communities have declining population rates and rising unemployment rates … we have a different kind of problem. If we don’t fix this housing issue, it could be dire for us,” Snapp said.

Peco has just under 1,000 employees and desperately needs more, said Risley. Employee turnover is a common problem in the labor-intensive poultry industry, but the rates at the Pocahontas plant have been significantly higher. This year alone, the plant has lost about 1,000 workers, a 100% turnover rate, he said. The high turnover rate puts added pressure on the workers who remain. Each day, the plant processes 200,000 chickens, or about 1.4 million per week. Its primary customer is Buffalo Wild Wings.

“We have birds to process everyday … when we’re not fully staffed, it means our employees have to work longer hours … it’s tough,” he said.

The company runs a bus from Paragould and in Pocahontas to help workers get to work. The quality of the workers lost is an issue as well, Risley said.

In 2014, Peco announced it would build a poultry processing plant and a hatchery in Pocahontas and a $35 million feed mill in Corning. The projected payroll for the entire operation was set at about $20 million per year. Any dollar added to a local economy turns over 6.5 times according to many economists, which means Peco could add more than $100 million annually to the economy in Northeast Arkansas.

The 272,000-square-foot plant cost $165 million to build. It was built on 200 acres in the city’s industrial park.

The benefits go beyond the workers hired at the plant, hatchery, and feed mill. At least 1,000 chicken houses have been contracted in the region to provide chickens to the processing plant.

Scores of truckers move the chickens and feed, and it has secondary economic benefits such as providing more fuel, restaurant, and other customers in the region.

Tuscaloosa, Ala.-based Peco Foods is the eighth largest poultry producer in the U.S., according to the National Poultry and Food Distributors Association. The company began its Arkansas operations in 2011 when it opened a poultry processing plant in Batesville, and then opened a feed mill in nearby Newark.