Economic Impact - Pork Packing Plant Closures

With the closures of five different pork packing plants throughout the Midwest, research was done to evaluate the economic losses from suspending processing at each facility. To see the exact numbers from the research, click on the links below.  

A combined slaughter and processing pork plant causes a measurable increase in economic activity within each community where the operations of the plant are located. Common measures of economic activity are: Employment (jobs), Labor Income, Value-Added and Output (sales). When a meat processing plant, that also slaughters, suspends production, but still pays employees, this causes a series of economic activities (impacts) to stop. For these summaries, the net economic impact was broken into two events: 

  • Suspending production (weekly impact) 
  • Paying employees of the plant (weekly impact)

The magnitude of these economic activities is largely related to the presence of industries which supply the needed inputs for a packing plant. 

The operations of a pork processing plant that slaughters require purchases of pigs, equipment, chemicals, professional services, and purchases of many other inputs to produce pork for sale. The direct purchase of supplies and equipment are known as direct effects. The suppliers and vendors used by the pork processing plant then must purchase inputs to support the pork processing plant operations; these are known as indirect effects. Those who work in the pork processing plant and for the suppliers and vendors then use their additional income to make household purchases; these are known as household or induced effects. Taken together, the sum of direct, indirect and induced effects are known as total effects and accounts for the total multiplier effect present from the operations of the pork processing plant.