A plan by Triumph Foods to build a second facility in northwest Iowa shows that not all pork plants are the same.
In mid-May, Triumph and Seaboard Foods announced a joint venture to build the plant in Sioux City, Iowa. Site work is expected to begin this summer, with construction completed in July 2017. Fewer hogs are slated to be processed than in St. Joseph, with the price tag set at $264 million. It cost $150 million to build the St. Joseph plant, which opened in 2006.
The difference doesn’t stop there. The Sioux City plant is expected to bring 1,100 jobs, compared to the almost 2,800 workers in St. Joseph. The new plant will have 208 management positions and 902 production and maintenance positions.
Starting wages also tell the story of differences between the two operations. On its website, the producer-owned Triumph advertised to fill production jobs with a starting/training pay rate of $11.50 per hour. Once workers become qualified — or reach their 91st day of employment — hourly pay increases to $13.15. A new labor contract could increase that rate to around $14 an hour.
In Iowa, a report from the Taxpayer Research Council in Sioux City said average pay has been pegged at almost $34,000 — or $16.28 an hour for production and maintenance jobs. Management-level positions are due to earn $30.14 hourly.
“This hourly wage is above industry standard,” the analysis said, adding that additional employment and a second shift in the near future have both been discussed.
The council said the average annual income for production workers in Iowa could potentially lead to eligibility for certain welfare programs —based on family size and the number of employed household members.
Dr. Scott Brown, an agricultural and applied economics professor at the University of Missouri, called Triumph’s planned starting wage for Sioux City “right in the ballpark” for the industry. He based the evaluation on reviewing a small amount of data and adjusting for inflation.
“I think they’re going to find themselves adjusting as they need,” Dr. Brown said.
Justification for the plant’s existence resides in the depth of hog production in both Iowa and Minnesota, as well as the Midwest in general, he said.
“That plant has to run at full capacity,” Dr. Brown said. “We’ve got a lot more hog numbers and we need a lot more capacity.”
Increased competition in the processing business will likely include provision for newer technology at the Iowa plant than in St. Joseph, he added.
The research council said the Iowa Economic Development Authority Board approved $13.2 million in tax incentives for the plant in May, including job creation tax credits.
Marty Dougherty, Sioux City’s economic and community development director, said the local history in meat processing and stockyards resembles St. Joseph’s vibrant agricultural growth on the South Side. A John Morrell meat processing plant that had employed 1,400 people closed five years ago in Sioux City.
“It was sort of a long time coming,” he said of the Triumph-Seaboard decision. “We did look in the food processing industry. It was kind of a good fit.”
He cited the city’s present labor pool, supplies and machinery already in place as assets to the project. The site was developed in anticipation of such a facility’s eventual arrival.
Hopes by Triumph to build a plant in East Moline, Ill., failed to gain traction, which Mr. Dougherty said helped fuel Sioux City’s ambitions.
“Basically, I think the key was a large site,” he said.
The contract includes partial tax rebates for Triumph’s first five years in existence. Other incentives range from an agreement to construct road improvements, with a forthcoming application for state transportation funding to be submitted.
Production staff will start out in one shift, meaning Triumph won’t initially lay claim as the Sioux City area’s largest employer. Mr. Dougherty said the potential of a second shift would lead to more jobs. It’s already destined to become one of the largest development projects the city has ever seen.
Pay that seeks to lure the necessary work force to fill production and management positions was another key in the negotiations toward creating a second Triumph plant. Some components of the incentives were related to wages — including training of workers.
“They’re committed to competitive wages,” Mr. Dougherty said of Triumph and Seaboard.
Triumph officials provided a brief written statement but did not answer questions.
“Although not determined and finalized yet, wages will be market-based and completed in advance of hiring needs,” the company said.
Patt Lilly, president and chief executive officer of the St. Joseph Chamber of Commerce — and formerly Triumph’s chief administrative officer — called the company’s Iowa expansion beneficial to the local business community.
“I don’t believe it will change anything with respect to their role,” Mr. Lilly said. “We would certainly want to support the company in any matter. We certainly want to assist in any way that we could.”
“I think probably the most significant impact is they will need to address the employment,” he added. “That’s a fairly substantial number.”
Sioux City will likely have a slightly larger labor pool than what Triumph had available in St. Joseph 10 years ago.