Meat industry layoffs in Iowa and across the country are familiar. Fort Dodge used to be a meatpacking town. So were Estherville and Cherokee. Spencer, too. It was not a huge surprise that Tyson announced it will close its Perry pork plant in June, idling some 1,200 workers.
Of course, the first question in our selfish mind was “What about Storm Lake?”
The quick answer is that Storm Lake always has been the most profitable and efficient pork operation for IBP and then Tyson. We’re also at the center of swine production and infrastructure. Storm Lake probably will pick up processing displaced by Perry. The hogs keep coming, and they must go someplace.
The meat industry has been in a shakeout seeded by the pandemic, which intensified over the past couple years. Just after the Perry news, West Liberty Foods announced that it would lay off 260 workers as it shifts turkey processing to Illinois. Before that, Tyson announced a wave of chicken slaughter layoffs. More consolidation is expected.
The pork industry is poised for a better 2024. But the lesson from Perry, Estherville, Cherokee, Spencer and Fort Dodge is that you just never know for sure.
Storm Lake is a world protein center thanks to turkeys and swine. More than 3,000 people work in Tyson’s poultry and pork complexes here. Tyson has stuck with its turkey plant through thick and thin — a massive fire, and repeated bouts with avian flu — with a regional infrastructure feeding the slaughter operation.
Likewise, hog confinements locate as closely as possible to Storm Lake. We are at the hub of a huge livestock enterprise plugged into Iowa Select and regional feeders. Consolidation has favored this location so far.
We are old enough to remember when Hygrade shut down its pork plant here over four decades ago, just as the Farm Crisis was about to hit. It was a huge trauma. We had been slaughtering here since the 1920s. The union was strong. Until everything just shut down. It stayed dark long enough to bust the union and make the town desperate. Storm Lake did all it could, including favorable tax schemes and water rates, to lure IBP.
Most of the old union boys had left, many for the Wilson pack in Cherokee that was over 700 workers strong. Immigrants filled out the roster when IBP ramped up on wages 50% lower.
That whole history transformed Storm Lake.
About the same time, IBP got out of beef production in Fort Dodge. Over the years and different owners, slaughter ceased and processing eroded in Cherokee, until Tyson closed it down in 2014. Now, Lopez Foods has a few dozen employees there and is set to grow.
Cherokee used to be bigger than Storm Lake. In1960 its population peaked at 7,724. By 2020 it had dropped to 5,200. When Estherville had meatpacking in 1960, its population was 8,000. Without it, the town shrank to 6,000. Over the same span, Storm Lake has grown from 7,800 to 11,270, according to the Census.
Perry will lose people. It will hurt the retail economy. It is close enough to Des Moines that many workers will make the commute and find they are better off than they were with a knife. Still others will get jobs in plants that need help in Storm Lake, Denison and Sioux City. It will not be fatal to Perry, population 7,300.
Cherokee is a lovely community with a cool downtown. The Mental Health Institute and sex offenders commitment unit employ over 200. Light manufacturing and warehousing are steady. Farm income has been good. Health care is growing. Western Iowa Community College is a big asset. Population has stabilized. The only direction is up. It could be a lot worse. Cherokee is getting better.
Tyson has invested a lot of money in Storm Lake, along with the rest of the hog complex. But what if the water gets too expensive? The Dakota Aquifer pocket that serves Storm Lake and Cherokee is maxed out for pumping. The Jordan Aquifer is declining. Tyson has ponied up for a new water tower, a good sign. Until you can’t get water to that tower at the right price. Or until disease prevents poultry production. We think about these things because we remember when Hygrade closed.
It can happen. Perry was never Storm Lake to IBP or Tyson. It is a matter of profitability. When cattle are racing ahead of a panhandle wildfire, it becomes a profit issue for Amarillo. When agri-industry drains the Dakota Aquifer, Storm Lake can become cost-prohibitive. We didn’t have a plan B with Hygrade, that any of us knew. We have the college. We are a center for professional services and healthcare. Mainly, we are a town that depends on meatpacking. Fort Dodge diversified its industry when the cattle fled. Spencer swore off butchering. You just never know, as they did not in Perry or Estherville or Cherokee. They thought it would go on like it had.
Art Cullen is the editor of the Storm Lake Times Pilot in Northwest Iowa, where this column appeared. For more columns and editorials, please consider a subscription to the Times Pilot. Or, if you wish, you can make a tax-deductible gift to the Western Iowa Journalism Foundation to support independent community journalism in rural Iowa. Thanks.
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Witnessed a parallel event in the petroleum support industry in Texas, Mid eighties. Wages are good, then a slowdown, finally layoffs. Rigs shut down. Drilling Tool plants idle. The Petroleum Industry knew how to squeeze the workers. With no jobs, they lost first their vacation homes, then their fancy pickups, finally their Mortgages were at stake. Idle Drilling Rigs could be bought at $.03 on the Dollar.
The Independents were squeezed out. The skilled Machinists were offered their old jobs for 40 percent of their former level and many took it to attempt to keep from losing their homes. They had already lost everything else. Oil picked up again with less diversity in Drilling and Exploration Companies and cheaper Machine tool wages.
The real punch line to this is the players that pulled this off all got elected and showed up in Washington DC in 2001.
Great OP ED, ART CULLEN - about pork plants closing - and how you just never know: the boom and bust cycle that is Iowa animal production and how it plays out in our towns and the whole state.
Brings me to question: what areJefferson, Greene County - and other surrounding counties doing to help? And to attract some of those workers to our open jobs?