About 3,000 Tyson employees are losing their jobs as the result of Tyson Foods’ recent decision to close four processing plants after the company, based in Springdale, posted losses of $417 million in the third quarter. Sales were down three percent from the third quarter of 2022. Closures include the Noel complex in Southwest Missouri.
Chris Meador, a Carroll County poultry farmer who is chairman of Arkansas Farm Bureau’s poultry commodity division, said there will be an influx of chickens grown for the Noel complex that will be processed at Northwest Arkansas plants including Berryville and Green Forest, resulting in less demand from growers in Carroll and Boone counties. He said 39 producers in Carroll and Boone counties were recently informed that their contracts are being cancelled.
“That is some hardships for those folks being laid off at plants, for sure, but they can get unemployment or another job,” Meador said. “The people who produce birds on the ground don’t have a lot of other options when their contracts end. Here in Carroll and Boone counties, there are not a whole lot of other chicken processors to grow for in the area other than Tyson.
“Recently a few others have come in and we have been blessed for that. But I’m sure these other companies are feeling the same impacts as Tyson. Over in Washington and Benton counties, there are a lot more companies who might be able to pick up some of the extra capacity. But even if you find a new buyer, it may have different rules or specs that would require a large investment by these producers.”
Tyson’s strategy was to terminate contracts for growers with two years or less left on their contracts. Meador said Tyson has a formula to buy out the existing duration of the contracts. Producers affected ranged from two-house to six-house farms.
“It is going to be tough on those who lost all their barns because their source of income stopped the morning this was announced,” Meador said. “Some of them will have enough to pay off their loans and, for others, it isn’t near enough. It will put them all in a financial pinch. And the impacts spread out from there. Farmers won’t have money to spend in the feed store, the hardware store, grocery stores and restaurants. It will trickle down, for sure. It will affect a lot of us economically.”
Meador said with inflation, it is hard for anyone to make a profit. But it is more extreme with producers. Tyson provides the birds and feed, but all the other expenses are on the producer’s plate such as utilities, upkeep of the farm, and labor. There is no unemployment assistance to farmers and the employees of chicken producers may now be without jobs.
Meador said producers are paid a set price for the product. When expenses go up, the growers can’t negotiate for a higher price. Tyson and other integrators can pass on increases to consumers.
“We don’t have that luxury,” Meador said. who was not impacted by the recent cancelled contracts.
Donnie King, president and CEO, Tyson Foods, wrote in a press release that, “The difficult decision to close four chicken facilities in North Little Rock, Arkansas, Corydon, Indiana, Dexter, Missouri and Noel, Missouri, demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization, and build on our strategy of making Tyson Foods stronger in the long-term.”
A Tyson spokesperson said the plant in Noel will close Oct. 20, and work performed there moved to other facilities. “While the decision was not easy, it reflects our broader strategy to strengthen our poultry business,” the spokespersons said. “We did not take this decision lightly and taking care of our team members is our top priority. All impacted team members are encouraged to apply for open, posted roles within the company and we will assist in offering relocation benefits where applicable. Team members receiving benefits today will see no change to those benefits and will be paid for any earned but unused vacation through the date of termination. We are closely coordinating with state and local officials, including the Missouri Office of Workforce Development, to connect all team members to resources and assistance available.”