There is an old saying, perhaps trite: You don’t know how tough you are until tough is the only option.
It’s only hog farming to some, but it has been the lifeblood of Beaver County. But now with Smithfield Foods and its operation suddenly leaving the state, locals will have to deal with the aftermath.
“We’ll figure it out. Seems like we always do,” said Beaver County Commissioner Brandon Yardley.
This week, Smithfield announced it will end contracts with 26 hog farms in Utah to “optimize” its supply chain for more efficient operations in the face of an industry oversupply of pork, weaker consumer demand and high feed prices.
The press release said this:
“The contract terminations will result in the elimination of Smithfield positions that support contract farm relationships. The company will offer relocation opportunities for affected employees and provide transition assistance. While the exact number is to be determined, the number of Smithfield positions eliminated may be up to one-third of the 210 currently employed in its Utah hog production operations,” it said.
“Our industry and company are experiencing historically challenging hog production market conditions,” said Shane Smith, president and chief executive officer. “These are difficult decisions, but they are necessary to help our company remain competitive in this operating environment.”
Brett Bunker does not necessarily blame Smithfield for pulling out. It was not cost effective for them.
“They were just losing too much money and they said enough’s enough. And you can’t blame them. You know when your business is failing, it doesn’t matter. Like I can’t stop them.”
Bunker said his life was already stressful from the challenges of farming and ranching in rural America and, in particular, from taking hits from critics in Utah because of the agricultural use of water and the impacts on the ailing Great Salt Lake.
“How do we overcome some of these obstacles? And then when you go home at night, when you’re finally done working, and you turn on the news, the first thing you hear about is how agriculture has too much water,” Bunker said. “They don’t know what we’re doing with it. They think we are misusing this precious commodity. And we shouldn’t be able to do what we do. We’ve got too much.”
He said it is demoralizing for an industry already fraught with uncertainty.
“And so you finally wind down and you go to bed and then you wake up because the sheriff’s office calls you at 2 o’clock in the morning because you’ve got cows out,” Bunker said. “They broke through the fence and you’ve got cows on the road and now it’s dark and cold and you wake up all your kids and your wife and you’re chasing cows off the road trying to get them back in, in the middle of the night. And you’re gonna wake back up in the morning after you get back to bed and do it again. And that’s why agriculture is like it is — nobody wants to really do it.”
A third of what Bunker grows went to the hog farms to feed the animals and now, Smithfield’s problems have become his own.
“These are the struggles we face from day to day, and I don’t think people understand. And the only way I thought to portray it is just that. What if I came to everyone in the population of Utah and said you all are taking a 33% pay cut starting tomorrow? Merry Christmas. That’s right. That’s really what’s happened.”
Scrambling for solutions
Bunker said it is not just a Beaver County problem. It’s a Millard County, an Iron County problem. He said he knows someone in Vernal who grows corn for the hog feeding operations. The trickle-down effects are astounding, he emphasized.
“So this is really a statewide issue. I’m pretty sure they bought wheat out of Green River, too.”
The 2017 agricultural census put total hog inventory sales in Beaver County alone at $220 million.
As of 2021, according to the Utah Department of Agriculture and Food, Utah had a total inventory of 940,000 hogs.
Beaver and Iron counties were the top two counties for hog production.
“We are devastated for the hog farmers and employees in Beaver County,” said Craig Buttars, commissioner of the Utah Department of Agriculture and Food. “We are extremely concerned about what this means for the local agriculture industry and economy. Since the announcement made by Smithfield, we have been working closely with local and state government officials to figure out solutions for this community moving forward.”
The Utah Farm Bureau, too, is doing what it can to help.
“We are disappointed in the news that farm families will have their contracts canceled,” said Spencer Gibbons chief executive officer of the association. This decision will have a negative impact on the families and communities in rural Utah that have relied on this business model for decades.”
Gibbons emphasized the Utah Farm Bureau will work with local families and other agricultural leaders in the state to soften the blow.
Bunker, however, is a realist and sees the Smithfield decision as just another setback to rural Utah and is not so sure how fast the area will recover.
“It’s more than just hog farms closing. It’s a way of life. It’s an economy. It’s the way people make their living.”
Beaver County Commissioner Tammy Pearson said the downsizing of the hog industry in this area has been a slow, painful process that affects everyone.
“So we had 49 contractors that lost their jobs a year ago,” she said. “And they have been moving on and working in Cedar City or somewhere else. They have built their businesses on their own, but they are trying to stay here, because this is our home and we are kind of tough and bullheaded. We don’t want to leave, so we are going to figure out a way to make an existence in Beaver County.”
She said what stings is these contractors impacted by the latest decision by Smithfield sunk their own money into the barns. It’s millions of dollars.
“They borrowed money, built their own barns through a Smithfield contract and they have like a 15-year contract with them and now less than five years down the road they’re done,” she said. “It’s a hard pill to swallow.”
Smithfield was Beaver County’s largest employer.
“Ever since the pigs came to town, Beaver County was sitting at No. 1 in ag producing receipts. And we have been for years, with our beef, our hay exports and the pigs. So for that to leave …,” Pearson said, her voice trailing off.
Yardley said it is too early to assess the economic impact and Smithfield’s offer of relocation of impacted employees is a hollow victory.
“It’s pretty devastating for the local community. There’s kids in school that are going to have to figure out something else. People who have been here 20 years that have been employees or some somehow tied to the pig barns are now going to find something else to survive. They are rooted in the community pretty deep. So to be able to just take Smithfield’s offer and transfer to another location, I don’t think that’s what they want to do. They want to be able to stay in our small community and be part of it.”
But Yardley said he is optimistic that Smithfield will make it right with the contractors through the buy-out clause, but it is tough.
“People understand this was a business decision, but it is hard for people to live with now.”
Clean energy implications
Rep. Carl Albrecht, R-Richfield, represents Beaver County and other rural areas of the state and says this region needs to weather the blow and continue to diversify its economy and grow — even if it is not easy.
“We’ve seen growth on the Wasatch Front, about 50,000 people a year moving in, and businesses and so forth. And we’ve seen growth in Iron and Washington counties in the southwest part of the state. So the area that’s not grown has been the areas in between from Nephi, south to Cedar City, east and west, north and south,” he said. I call it the hole in the doughnut. And you can’t continue to shove 50,000 people a year into four counties on the Wasatch Front.”
He did emphasize there is a central Utah agriculture facility being developed south of Nephi which will help agriculture in central and southern Utah. He pointed to the FORGE geothermal project, which has the potential to be huge in terms of proving technology to develop base load, clean energy.
But that is still years down the road.
In the interim, the cancellation of hog farm contracts in central Utah have implications for renewable energy.
Two years ago, Dominion Energy announced its plans to capture methane from hog farming operations in Beaver County, transform it into renewable natural gas and generate enough energy to heat more than 3,000 homes and businesses.
In the largest venture of its kind in the United States, Dominion and Smithfield were jointly investing $500 million over the next 10 years to develop renewable natural gas projects in the United States.
The projects were anticipated to reduce annual greenhouse gas emissions from U.S. hog farms by 2.5 million metric tons. Reducing pollution by that much amounts to taking 500,000 cars off the road or planting 40 million new trees each year.
That partnership, at least in Utah, is off the table and Dominion is now reviewing its options.
Albrecht pointed out there isn’t a place to process wool in Utah, or lamb, or hogs for that matter.
The wool industry in Utah is big business. The state is the fourth-largest producer of wool in the nation, shearing a little more than 2.1 million pounds in 2019 alone — accounting for about 10% of the nation’s total wool production. In 2019, the value of that wool was nearly $4.5 million.
A wool testing facility opened in Midvale in 2021, but — like what happened with the Smithfield hogs — the company could not, or would not make it work because processing the animals here didn’t fit into the bottom line.
“These guys have never been willing to process them in Utah. We offered that when they downsized the first time. The governor and the whole team of Utah offered to build processing plants here and they just told us they’re not interested,” Pearson said.
Added Yardley: “It’s not that anybody didn’t try. It just wasn’t something Smithfield was willing to do.”
Bunker says he is just going to hope for the best and, regardless, continue to do what is steeped in his soul: farming and ranching.
“It just seems like it is out of everybody’s control.”