VERNON, CA – Smithfield Foods, the largest pork processor in the world, will close its Vernon, California, plant and reduce its hog herd in the West, the company announced Friday. Owned by Hong Kong-listed WH Group Ltd, Smithfield Food is withdrawing from California by early next year, citing red tape like that from Proposition 12 and the generally high costs of doing business in the state.
At the same time, the company said it will align its hog production system by reducing its sow herd in the western region. The company also said it will decrease the size of its sow herd in Utah and is looking at options to exit its farms in Arizona and California.
Vernon harvests company-owed hogs under the Farmer John and other brands, and those customers will in the future be serviced from the Smithfield facilities in the Midwest.
In an interview with Brownfield Ag News, Jim Monroe, vice president for corporate affairs at Smithfield said, “It does not change a thing about our commitment to our customers in California. We’ll continue to service them with the same Farmer John brand that they’ve grown to love. We’ll just be doing it from different locations in the Midwest.”
California is a small pork-producing state with a large consumer market representing 13 to 15 percent of U.S. demand that can only be met by more out-of-state production.
Outside of California, pork producers are resisting California’s hog housing standards passed in Proposition 12 because of the costs, according to Monroe who blames the Vernon closure on “high costs and over-regulation.”
California’s Prop 12 is currently before the U.S. Supreme Court over whether it can legally dictate housing sizes to non-California pork producers whose products are sold in the Golden State.
Smithfield has 40,000 American jobs at 45 facilities with nearly 500 company-owned farms. In South Dakota, its Sioux Falls facility harvests and processes about five percent of the U.S pork supply.
Another player entered the field in South Dakota when Nebraska-based Wholestone Farms, an entity owned by regional pork producers, announced plans to build a $600 million pork processing facility in Sioux Falls. It is anticipated the plant will employee 2,000 workers and harvest 6,000,000 hogs per year on about half of the 172 acres of land the company bought near I-229 and Benson Road.
There is organized opposition to halt that construction. “Citizens for a Sustainable Sioux Falls,” is seeking a moratorium on any action taken by the Sioux Falls City Council and is also pursuing a ballot initiative that would forbid the construction or operation of any new slaughterhouses within city limits.