Tyson Foods’ Plant Closures: A Deep Dive into the Impact on Local Communities and the Poultry Industry

On August 7, Tyson Foods announced a plan to shut down four chicken plants located in North Little Rock, Arkansas; Corydon, Indiana; Dexter, Missouri, and Noel, Missouri between late 2023 and early 2024. The subsequent effects include:

• Cutting nearly 3,000 jobs.

• A stark shift from the company’s position in April, where they had already decided to lay off 15% of senior leadership and 10% of corporate staff.

• Following the previous closure of plants in Van Buren, Arkansas, and Glen Allen, Virginia, impacting almost 1,700 workers.

In the company’s statement, the relocation of production closer to its customer base was cited as a prime reason for the closures. Yet, the financial numbers tell a slightly different story:

• The recent closures represent about 10% of Tyson’s chicken slaughtering, shares Chief Financial Officer John R. Tyson.

• Despite a target of achieving $1 billion in productivity savings by the end of 2024, Tyson Foods exceeded this goal in the second quarter of 2023.

Economic Implications on Local Communities

• Corydon, Indiana: Over 500 job cuts. This closure will likely escalate the unemployment rate from its current 3.8% in a town where the average income stands at $19,825, well below the national average.

• Dexter, Missouri: 680+ jobs to be lost, leading to secondary impacts like the city halting plans for an $18 million wastewater treatment facility.

• Noel, Missouri: 1,513 jobs impacted in a community of 2,100 residents. The local administration emphasizes the gravity of the situation, acknowledging their inability to absorb the unemployed workforce.

• North Little Rock: 300 workers face unemployment. Here, the median household income is $45,590 with a poverty rate of 21.7%.

A Historical Perspective

The North Little Rock facility, which will be seeing its doors close soon, started in April 1968 under Prospect Farms, Inc. By 1969, it was acquired by Tyson Foods. A poignant statement by John H. Tyson, the chairman of Tyson’s board, in 2018 during its 50th-anniversary celebration, highlighted the plant’s importance in Tyson’s growth.

Yet, the workers, who once received praise, are now at the receiving end of the corporate restructuring axe. The layoffs shed light on the overarching theme of profits outweighing human welfare.

Arkansas’s Agricultural Landscape

Agriculture plays a pivotal role in Arkansas’s economy, with a yearly revenue generation of over $16 billion. The poultry industry, with more than 2,000 farms, significantly contributes to this figure.

Jade Thompson, an agricultural economics professor at the University of Arkansas, underscores the vital position poultry holds in Arkansas’s job market, with one in four agricultural jobs tied to the poultry sector.

Repercussions and The Road Ahead

The closure of two Tyson plants, particularly in North Little Rock, sends ripples throughout the Arkansas agricultural community. Those affected directly are not only the workers but also the Arkansas farmers.

The aftereffects might echo in grocery stores as consumers could potentially face rising prices due to supply constraints. Moreover, inflationary pressures could intensify, amplifying the economic fallout.

In Conclusion

As the poultry giant embarks on its restructuring journey, communities grapple with the uncertainties it brings. The juxtaposition of corporate profit motives against the backdrop of community welfare, especially during the aftermath of the Covid-19 pandemic, frames a larger narrative about industries and the lives intertwined with them. Only time will provide clarity on the long-term consequences these decisions have on local economies and the broader poultry industry.