Tyson Foods closing Iowa pork plant; company also settles wage-fixing lawsuit

Tyson Foods is closing a pork plant in Perry, Iowa. The Springdale-based meat giant is eliminating 1,200 jobs, with the closure slated for June 28. The plant slaughters about 9,000 hogs per day.

“After careful consideration, we have made the difficult decision to permanently close our Perry, Iowa pork facility. We understand the impact of this decision on our team members and the local community. Taking care of our team members is our top priority, and we encourage them to apply for other open roles within the company,” Tyson corporate spokeswoman Laura Burns said

She said Tyson is working with state and local officials to provide additional resources to those who are losing jobs. Perry, Iowa, has about 8,200 residents and is located near the capital city of Des Moines.

“It’s a big blow to the community, and it’s the largest employer in the area, “ Des Moines Mayor Dirk Cavanaugh said on Monday (March 11).

Tyson’s pork business reported an adjusted operating loss of $128 million last year, down from income of $198 million the prior year. Pork sales revenue for the fiscal year was $5.768 billion, down 7.9%. More recently, the industry reported better financial metrics, with packer processing margins averaging $25.93 per head versus $19.29 a year ago. The pork wholesale prices rose 7.2% from a year ago, offset by 1.7% higher hog prices. Hog slaughter is up 1%  from a year ago with fractionally higher production, according to a March 5 Stephens Inc. Commodity Report.

Tyson operates five other pork plants in Iowa and recently opened a new bacon processing plant in Bowling Green, Ky. Tyson said production will be shifted to its other plants in the region.

The Perry announcement follows six chicken plant closures in 2023, eliminating about 4,400 jobs, including nearly 1,000 in Van Buren.

LAWSUIT SETTLEMENT
The company has also agreed to a $72.25 million settlement in a wage-fixing suit in its U.S. meatpacking plants. The class action was filed in 2022 claiming meat packers suppressed worker pay at 140 plants in an alleged conspiracy among Tyson, JBS and other companies to artificially keep wages low. The lawsuit said companies violated antitrust law by sharing confidential compensation data via surveys and meetings.

JBS agreed to pay $55 million for its part in the settlement filed in a Colorado federal court on March 8. Perdue previously agreed to pay $1.25 million and Seaboard Foods agreed to pay $10 million to exit the litigation. The suit also requested Cargill, Hormel, National Beef, Smithfield, Tyson Foods and JBS to provide worker’s compensation data and testimony as the plaintiffs pursue pending claims. Tyson and its competitors agreed to the terms of the settlement.

The meat companies had asked the court to dismiss the suit, which was declined last year, making the way for the recent settlement. None of the defendants provided comments on the settlement.

“The value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation,” noted attorneys for the plaintiffs.

Shares of Tyson Foods (NYSE: TSN) closed at $55.73, up $1.62 on the day. Over the past 52 weeks, the share price has traded between $44.94 and $63.28.