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Smithfield Foods to Close California Facility, Reduce Hog Production in West — Commodity Comment

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By Robb M. Stewart

Smithfield Foods Inc. is scaling back its hog operations in the U.S. with plans to close a facility in California and shrink its sow herd in the western region in an effort to tackle what it said are escalating business costs.

On its hog plans:

Smithfield, which is owned by Chinese pork company WH Group Ltd., said it would cease all harvest and processing operations in Vernon, Calif., in early 2023 and align its hog production system by reducing its sow herd in its western region.

The company would decrease its sow herd in Utah and is exploring options to exit its farms in Arizona and California, it said.

Smithfield harvests only company-owned hogs in Vernon, and it said it would serve customers in California with its Farmer John brand and other brands and products from existing facilities in the Midwest.

The steps are being taken due to the rising cost of doing business in California, Smithfield said.

On the jobs impact:

Smithfield is providing transition assistance to all affected employees, including relocation options to other company facilities and farms as well as retention incentives to ensure business continuity until early next year, the company said. It reached an agreement this week with the United Food and Commercial Workers International Union, the International Brotherhood of Teamsters and the International Union of Operating Engineers as part of its plan to close the Vernon facility, it said.

Smithfield provides more than 40,000 U.S. jobs at 46 facilities and nearly 500 company-owned farms, the company said.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

06-10-22 0859ET

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