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Finding workers critical for planned pork plant in Sioux Falls

Questions over labor supply in a tight market linger for Wholestone Farms. Farmer-owned cooperative says better pay and conditions will attract workers. They also recruit internationally.

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A graphical rendering of a planned Wholestone Foods pork processing plant in Sioux Falls, South Dakota.
Contributed / Aaron I. Hoffman
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SIOUX FALLS, S.D. – There aren’t enough people available for the jobs available in Sioux Falls.

That’s apparent based on a 2% unemployment rate, which equates to about 3,300 people who are looking for work in the metropolitan area.

One of the concerns raised by plans for a new pork processing plant in the city is the current lack of available labor. After all, working in a pork plant, where animals are killed and cut up for packing, doesn’t sound pleasant.

It’s a familiar refrain in conversations with critics of Wholestone Farms' plans to build a $500 million processing plant in northeast Sioux Falls. But it’s also a part of the broader discussion among civic and business leaders as companies like Amazon come to the market .

Experts in animal processing admit that labor is the prime challenge to growth in the industry, whether that’s pigs, cows or poultry.

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“Meatpacking in general is a highly trained business,” said Lee Schultz, an economist with Iowa State University Extension. “It’s not something you can just hop on the floor and start slaughtering and cutting meat. There’s a level of training and expertise needed. So that challenges the labor supply as well.”

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Luke Minion, chairman of the board of Wholestone Farms, a farmer-owned cooperative planning to build a pork processing plant in Sioux Falls.
Contributed

But it’s one that Wholestone says is solvable. The farmer-owned cooperative owns a plant in Fremont, Nebraska, that is fully staffed, said Luke Minion, chairman of the board.

That’s because the company pays well, has good benefits and a culture that supports employees, he said.

The Sioux Falls location will be of similar size in terms of workforce. Both plants, at full capacity, hope to process about 6 million pigs per year with more than 1,000 workers.

“It’s going to be a good place to work with good pay,” he said. “We are not ignoring (the challenge) but we will staff Sioux Falls.”

Minion points out that those numbers also reflect full capacity with two shifts per day. The Fremont plant currently has just one shift. The Sioux Falls plant also would start with one shift, which means around 600 workers.

“The second shift, the night shift, will be more difficult, for sure,” he said. “But we know that, which is why we are allowing a two-year period between the first shift and adding the second shift.”

'Time becomes your friend'

If all goes as planned, construction of the plant is going to take two-and-a-half years, which allows for a large window to recruit and hire workers, Minion said. That includes not just front-line workers but also engineers, maintenance and support staff.

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“Time becomes your friend when you are trying to build out teams,” he said.

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Wholestone Farms butcher shop in northeast Sioux Falls. The City of Sioux Falls issued an occupancy permit for the building on Oct. 7.
Patrick Lalley / Forum News Service

Labor is just one of the facets that Sioux Falls voters will consider on Nov. 8 when they decide whether to approve a ban on any future slaughterhouses in the city. The proposed ordinance was initiated by Smart Growth Sioux Falls, which opposes Wholestone’s plans.

Smart Growth has also sued the city to rescind permits for a custom butcher shop that Wholestone built on the site of the proposed processing plant near the Benson Road exit on Interstate 229.

Wholestone believes the butcher shop meets the current definition of slaughterhouse in city code, meaning the proposed ordinance wouldn’t apply to the much larger processing plant. That suit won't be resolved until after the election.

Still, the labor squeeze isn’t likely to change soon in Sioux Falls or most of the country.

Early in the conversation about Wholestone, Mayor Paul TenHaken raised concerns about housing, in particular. The mayor hasn’t said much about the project, and declined to talk specifics because of the lawsuit. But in general, the availability of safe, affordable child care is keeping many potential workers at home.

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Sioux Falls mayor Paul TenHaken

“That’s a very specific thing but in my opinion it’s the No. 1 thing keeping people out of our labor force is affordable and safe child care,” he said.

That’s in part due to COVID-19, when people were forced to stay at home. Coming out of the pandemic people figured out ways to make a living at home and still take care of their children.

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“That’s changed dramatically,” he said. “That’s the new normal that we are trying to work in. We grew by 7,000 people last year and we’re at record low unemployment. Those two don’t sync up. If you grow a record number of people you should have people to fill the jobs and it’s the opposite.”

Market forces at work

The labor shortage and a housing crunch are challenges, but a city can’t just stop growing, said Jeff Griffin, CEO of The Greater Sioux Falls Chamber of Commerce.

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Jeff Griffin, president and CEO of the Greater Sioux Falls Chamber of Commerce.
Contributed

The chamber opposes the ban on new slaughterhouses, saying it sets a bad precedent for business development in general.

If a company, driven by market forces, believes it can find the workers to make a profit, then it’s the chamber’s job to support that effort, he said.

People have always moved to where the jobs are, Griffin said. And Sioux Falls is a great place to live, work and raise a family.

“They will be able to get the workers,” he said. “We are going to get this ramped up.”

Robert Peterson
Robert Peterson, treasurer for Smart Growth Sioux Falls, which opposes new slaughterhouses in Sioux Falls.
Contributed

Opponents say it’s the type of industry that Wholestone represents, that is the reason for concern. Companies such as Amazon, which is hiring up to 1,000 workers for a new facility in Sioux Falls, shouldn’t be compared to Wholestone, said Robert Peterson, treasurer for Smart Growth.

“The reality is that younger generations no longer move to where the jobs are, they move to places with high quality of life,” Peterson wrote in a statement. “New slaughterhouse projects not only jeopardize our ability to solve the current workforce crisis, but also our ability to recruit and retain workforce in the future. If Sioux Falls wants to continue to grow as the ideal place to live, work, and raise a family, new slaughterhouses must be located outside of the city limits.”

Recruiting internationally

Where will the workers come from?

Minion said there will likely be some workers at the Smithfield Foods pork plant, and other manufacturers, who want to switch for better pay, benefits and conditions. Second shift workers at Smithfield may be drawn by moving to days.

Wages will start at $20.50 an hour for front-line workers with increases for more advanced or technical jobs. Wholestone pays for health insurance for the worker and their family and matches 401(k) contributions up to 6 percent.

The compensation package “will blow the doors off most of the manufacturing jobs in Sioux Falls,” Minion said. “No one is going to pay what we pay with the benefits we have.”

The company also recruits internationally, with a full-time office in Mexico, Minion said.

The Mexico office helps the recruits complete paperwork and follow the regulations to work legally in the United States, he said.

Minion said they do whatever they can to support international workers. They help them find housing and furniture, where to get groceries and how to get a drivers license. They may need language training and other assistance to transition to life in the United States but that extra effort helps bolster a quality workforce that is committed to the company and the community, he said.

Minion is also the CEO of Pipestone Holdings, the company that partnered with Wholestone to build the plant. Pipestone also recruits employees for hog production facilities they manage across the region.

“Most people enjoy having those families in their church and in their school,” Minion said. “Most people I know in South Dakota say you know what, they have enriched our community.”

Immigration is a politically charged topic, with allegations that it will increase crime.

“If people don’t say that out loud they are ignoring a major issue,” said Terry Houser, the Smithfield Foods chair in meat science at Iowa State University. “It would be very hypocritical to judge others by where they are coming from. They are hard jobs. Kudos to those people who want to go do that. You earn your money doing those jobs.”

Minion said that the implication of crime always comes with discussion of immigration.

“I first try to manage what I would call my response to ignorance,” he said. “Crime comes from all types of people in all types of situations. I don’t subscribe to that bias. My experience has been the opposite when we recruit legally from Mexico. They are highly motivated to earn and send money back to their families and did everything to avoid trouble. They came for one reason, to better their life. They are some of the best members of a community you can have.”

Patrick Lalley is the engagement editor and reporter for the Forum News Service in Sioux Falls. Reach him at plalley@forumcomm.com.
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