Southern Minnesota pork plant likely to close, laying off 1,000

A pork processing plant in southern Minnesota is poised to shut down and permanently lay off more than 1,000 people if a new owner for the Windom operation can't soon be found.

The move reflects challenging economic conditions for portions of the pork industry.

HyLife Foods filed notice with the state this week that its efforts to turn the business around have been unsuccessful.

"We have had to combat a number of challenges, including inflationary pressures, high grain costs, foreign exchange rates and the plant's operational losses," HyLife wrote in a memo to Minnesota Department of Employment & Economic Development.

"For some time now, the company has been exploring several strategic options that would have enabled it to continue go-forward operations despite these financial challenges. Unfortunately, so far, these efforts have not been successful."

Minnesota businessman Glen Taylor and a group of investors bought the former beef-packing plant in 2016, creating Prime Pork and Comfrey Farms.

In 2020, Canada-based HyLife bought 75% ownership of the plant from Taylor Corp., which is based in Mankato.

Glen Taylor, who owns the Star Tribune as a separate investment, sold his remaining ownership of the pork plant earlier this year.

The Windom plant can process 1.2 million hogs annually — about a third of HyLife's processing capacity.

"Our vision, investments and strong community involvement are a testament that we intended to be here for the long run," HyLife CEO Grant Lazaruk said in a statement Tuesday. "This is an extremely hard week, and we are unquestionably sad. We are doing our best to share the information we currently have."

The office of Minnesota Department of Agriculture Commissioner Thom Petersen said Petersen is traveling to Windom on Wednesday to meet with parties affected by the possible closure.

HyLife has grown the headcount at the plant substantially, which like others saw increased demand for meat during the pandemic. There were about 650 employees when HyLife took over the plant, and 1,007 are expected to be laid off if the plant closes. None are represented by a union. Like many processing plants in rural Minnesota, immigrants represent a significant portion of the workforce.

Layoffs could begin as early as Monday and end as late as June 2.

An excess of pork has pushed down prices and left the industry cautious about expansion, especially as elevated feed and energy costs have pinched producers.

On March 1, the nation had 72.9 million head of hogs — slightly up from a year earlier, according to the U.S. Department of Agriculture's quarterly report. Nearly a decade ago, the nation had 10 million fewer hogs.

Megan Roberts, executive director of the Minnesota State Southern Agricultural Center of Excellence, lives on a hog farm outside Madelia and frequently sees HyLife buses carrying workers between Mankato and Windom.

"We are in a downward price pressure right now across the hog commodity industry," Roberts said. "It's a tough time, and those prices are not necessarily as strong as we'd like to see at this time of year."

Minnesota is second in the nation only to Iowa in pork production. The closure of a large plant could also have a ripple effect across the region.

"Those pigs in those barns? [Farmers are] going to have to find out where they're going to take them," said Ted Winter, a Nobles County farmer and executive committee member with Minnesota Farmers Union.

Winter suggested the announced closure might be a last-ditch attempt to draw a buyer.

"They've got to find a new buyer," he said.

The company's notice to the state says "it is not possible to determine how successful the company will be in its efforts to sell all or a portion of its business or what the impact of any sale will be for employees."

If you are affected by the proposed layoffs, please reach out to reporter Brooks Johnson at brooks.johnson@startribune.com.