Northwest Iowa Pork Plant Raises Hopes For Rural Economy

So far the Prestage plant, which opened in March, has hired about 500 workers, most of whom come from the region. ( Jennifer Shike )

A growing school district, an active housing boom and rising pay scales are just a few examples of how the new Prestage Foods of Iowa pork processing plant in Eagle Grove, Iowa, is impacting the local economy.

Eagle Grove, a town of about 3,600 residents, is located only 6 miles from Prestage’s new $320 million pork processing plant. So far, the plant has employed about half of it’s projected 900 workers.

According to local news outlet, the Muscatine Journal, local leaders hope Prestage will help “stem but not reverse” the region’s population loss for the next few years.

For the first time in years, Eagle Grove schools have new students—about 75 this year, with more expected, reports the Des Moines Register.

The plant is also having ripple effects in work for warehouses, transportation companies and other businesses. Even competitors such as Tyson Foods are increasing salaries to attract beginning production workers.

A local billboard advertises “top dollar” pay at Tyson’s Storm Lake plant—$16 per hour for beginning production workers. The other side of the billboard promotes Prestage’s production pay, starting at $15.50 an hour and moving to $16 and higher after three months.

Is it a war for labor? "Absolutely, but not in a bad way," says Ron Prestage, leader of the North Carolina-based family hog and turkey business and a veterinarian. "People who are skilled in those jobs are highly sought after."

A History of Meat Processing

Iowa State University economist David Swenson estimates Prestage’s economic impact on the community at $574 million.

Ernie Goss, a Creighton University economist, put the value closer to $1.7 billion, spread out over nine counties. He points to Fort Dodge’s Webster County netting the largest piece of the pie—$607 million in economic impact, as well as the greatest housing boom in three decades. Only five homes were built in 2017, a number that is expected to reach 140 this year.

Critics say the tax incentives the state and county offered were not necessary, as northwestern Iowa was one of the only locations such a plant would be profitable.

Memories are short in this area, as many community members experienced a severe downturn in the 1980s when pork processor Hormel Foods and Iowa Beef Processors closed. The irony that a meat processor is helping to revive the community is not lost on many.

But Prestage says the plant came to where the pigs are. Iowa ranks first in pork production, and has 10 of the largest pig-producing counties in the nation. Five of them are in northwest Iowa.

So far the Prestage plant, which opened in March, has hired about 500 workers, most of whom come from the region. The company said 60% are white, 25% are Hispanic and the remaining 15% are Asian, African and black. Forty percent are female. Prestige plans to eventually add a second shift, with another 800 to 1,000 workers.