Green Energy Victim? Large California Meat Processing Plant to Close, Cites Utility Bills

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Essay by Eric Worrall

Next time Californians wonder why their supermarket shelves are empty, perhaps they should consider the road miles California’s insane green energy policies are adding to deliveries.

Smithfield Foods to shutter California meat-packing plant

Meat-packing giant Smithfield Foods says it will close its only California plant next year, citing the escalating cost of doing business in the state

By The Associated Press
June 12, 2022, 8:02 AM

VERNON, Calif. — Meat-packing giant Smithfield Foods said Friday it will close its only California plant next year, citing the escalating cost of doing business in the state.

The Farmer John meat-packing plant in Vernon, an industrial suburb south of Los Angeles, will shut down in February, with its 1,800 employees receiving severance and job placement support along with bonuses for those who choose to stay on the job until the closure, said Jim Monroe, vice president of corporate affairs.

Monroe said operating costs in California are much higher than in other areas of the country, including taxes and the price of water, electricity and natural gas.

“Our utility costs in California are 3 1/2 times higher per head than our other locations where they do the same type of work,” he said.

The shutdown is not expected to reduce supply or increase costs on products, and Farmer John Products will still be sold in California, Monroe said. 

“There won’t be any impact on our customers,” he said.

Read more:

The article mentions Smithfield received a $60,000 fine for exposing their workers to Covid.

Jim Monroe, Vice President of Corporate Affairs, has promised there will be no impact on availability or price.

I’m sure Jim means what he says, and the much lower costs at their out of state plant will obviously help. But if that meat has to be trucked in from another state, instead of being sourced and processed in California, fuel bills and compliance with California’s harsh road transport environmental laws might add to costs.

There is another potential problem.

The UN is predicting an imminent global food crisis, because of disruption caused by Russia’s war with Ukraine. I’m not trying to be alarmists, for now it appears the impact on the USA should be minimal. But if the situation deteriorates, the last place I would want to be is at the end of a very long supply chain.

In my opinion this closure effectively moves Californians further towards the back of the queue when it comes to distributing food supplies, if the coming food crisis unexpectedly impacts food availability in the USA.

[Note from Charles]

Eric, based down-under, will sometimes miss the broader backstory to US news. Utility costs are a convenient politically neutral issue for Smithfield Foods on which to blame their plant closure. Another reason for their exodus, and probably the primary one, from California is described in this article.

In 2018, California voters overwhelmingly passed Proposition 12, the Farm Animal Confinement Initiative.  Under the law, no business owner in California may sell meat from “a covered animal who was confined in a cruel manner, or is the meat of immediate offspring of a covered animal who was confined in a cruel manner.”  The statute requires that each pig must have at least 24 square feet of space to avoid qualification as a covered animal from confinement in a “cruel manner.”  Although the law applies to veal calves and hen-laying chickens as well and many producers in those industries have taken steps to conform, compliance places the greatest burden on pork producers.

The law took effect this past January.


via Watts Up With That?

June 13, 2022