Smithfield Foods, citing high costs of operating in California, to close pork plant

Smithfield Foods Inc., the largest pork processor in the U.S. by volume, is closing an 1,800-person plant in California and shrinking the size of its hog herd in the region, saying the cost of doing business in the state wasn't worth it.


Smithfield, owned by Hong Kong-based pork conglomerate WH Group Ltd., said on Friday that it would close the plant in Vernon, Calif., just outside of Los Angeles, in early 2023, citing higher taxes, utility costs and labor costs in the state compared with other areas where it operates.

The decision to close the plant comes as food suppliers are dealing with increased costs on items like livestock feed, transportation and packaging. Russia's invasion of Ukraine, one of the world's top grain-producing regions, has sent the price of livestock feed higher in recent months.

In California, the cost of utilities is 3.5 times higher per head to produce pork compared with the 45 other U.S. plants Smithfield operates, a company spokesman said. California officials didn't immediately respond to requests for comment.

"It's increasingly challenging to operate efficiently there," said company spokesman Jim Monroe. "We're striving to keep costs down and keep food affordable."

Smithfield also said part of the reason it closed the facility was the regulatory environment in the state. Specifically, a state law passed by voters in 2018 and backed by the Humane Society, called Proposition 12. It requires breeding pigs, or sows, to be able to lie down and turn around in spaces in which they are housed, essentially outlawing pork produced using small gestation stalls in most circumstances.

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