Small Nebraska Town Is Reeling From Exit of Meatpacking Giant Tyson
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Lexington’s economic engine is sputtering to a halt. Tyson Foods says that by Jan. 20 it will close its sprawling, 35-year-old meatpacking plant that has meant solid paychecks for 3,200 workers and transformed this remote community of some 11,000 people in central Nebraska. The news has ignited fears of economic devastation.
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America’s largest meat supplier, Tyson, says it is shutting down the plant to cut costs. Years of ranchers shrinking their herds have pushed cattle prices to record highs, hurting meatpackers’ profits and consumers’ wallets. Tyson says its cattle costs rose nearly $2 billion last fiscal year. Meat-industry executives have long expected a major beef-processing plant to close, especially as they on average now lose about $200 per head of cattle.
Word of the closing, something many locals never considered, landed the Friday before Thanksgiving, plunging Lexington into crisis. Plant workers, many immigrants and refugees, worry about finding new jobs. An exodus of residents would slash local school enrollment and the customer base for area businesses. Truckers, feedlot operators and cattle ranchers face hits to their bottom line without the Lexington facility, which slaughters up to 5,000 cattle a day.
Dawson County, where Lexington is located, stands to lose a quarter of its $2.2 billion annual gross domestic product, including 4,200 area jobs overall, according to estimates by Iowa economic-research firm Decision Innovation Solutions. The firm also projects a roughly $8 million drop in state and local sales-tax revenue.
Nebraska Gov. Jim Pillen said Tyson is considering using the plant to make refrigerator- case-ready meats for grocery stores, a pivot that would require only a fraction of its current workforce, he told The Wall Street Journal in an interview. Otherwise, he said, Tyson should sell the plant rather than leave it idle, as the company has following shutdowns elsewhere.
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