Local Impacts of Food Manufacturing Plant Closures in the Midwest

By Shengrong Hu

Food manufacturing is a cornerstone of rural and small-town economies across the Midwest. Meatpacking, dairy processing, and other food-related manufacturing facilities provide significant employment, support local service industries, and anchor agricultural supply chains across many small towns in the region. In some Midwestern counties, a single food processing plant ranks among the largest private employers, making local labor markets particularly sensitive to plant-level shocks.

In recent years, the Midwest has experienced several large food manufacturing plant closures that highlight this vulnerability. For example, the closure of Tyson Foods in Perry, Iowa, in June 2024 resulted in the sudden loss of 1,276 jobs in a small community where food manufacturing employment played a central role in the local economy.1 Beyond the direct layoffs, Schulz and Crespi (2024) estimate substantial spillover effects, including significant reductions in local sales revenue, value added, and tax collections, reflecting the broader multiplier impacts of the plant’s closure on the regional economy.

Similar events have occurred in other Midwestern states, including the closure of a large Tyson Foods poultry processing plant in Noel, Missouri, in October 2023, underscoring that these shocks are not confined to a single state but reflect broader pressures facing the food manufacturing industry across the Midwest region. The concentration of closures across this region underscores that these events are not isolated, state-specific incidents but part of broader industry pressures.

Figure 1 illustrates the geographic distribution of food manufacturing plant closures across the Midwest since 2010, including both large and small permanent closures.2 While the map highlights the overall spatial pattern of plant shutdowns, the analysis that follows focuses on major closures such as those in Perry and Noel, which represent substantial local employment shocks and are most likely to generate broader economic effects.

A density map of the US Midwest region showing food manufacturing plant closures since 2010. North and South Dakota have no records of food manufacturing plant closures in WARN dataset, while Iowa, Missouri, and Wisconsin stand out for both the number of closures and the scale of associated job losses.
Figure 1. Locations of food manufacturing plant closures in the Midwest since 2010.
Note: Each point represents a reported food manufacturing plant closure. Circle size is proportional to the number of workers laid off.

This report documents how employment evolves in Midwestern counties following major food manufacturing plant closures, comparing affected counties with similar counties that did not experience a food plant closure. The results show that these events have sizable direct impacts and consequences that extend beyond the plant itself, shaping employment patterns in local labor markets over time.

Why food manufacturing plant closures matter for local communities

Large food manufacturing plants play an outsized role in many rural and small-town economies across the Midwest. When such a facility closes, the most immediate impact is the loss of jobs at the plant itself, often occurring all at once and affecting a substantial share of the local workforce. In counties with limited alternative employment opportunities, this type of shock can significantly disrupt local labor markets and household incomes (Jacobson, LaLonde, and Sullivan 1993).

The economic effects of plant closure frequently extend beyond manufacturing. Job losses reduce household income and local spending, which, in turn, lower demand for retail, health care, construction, and other service industries. As a result, employment losses may spread gradually to non-manufacturing sectors, meaning that the total employment impact of a closure can considerably exceed the number of workers directly laid off at the plant (Moretti 2010).

Because these adjustments unfold over time, examining employment trends before and after a closure is essential for understanding the full local impact of major plant shutdowns. Previous research shows that local labor markets often experience persistent employment losses following major industrial shocks (Blanchard and Katz 1992; Celli, Cerqua, and Pellegrini 2023). The analysis below focuses on employment responses after large food manufacturing plant closures, documenting how local labor markets adjust in the months following these events.

Main analysis: Employment effects of major plant closures

Figures 2–4 show how employment evolves in counties that experienced major food manufacturing plant closures relative to similar comparison counties that did not.3 The figures plot percent changes in manufacturing, total, and non-manufacturing employment over time, with the closure occurring at month 0 and indicated in the figure by the dashed vertical line. Prior to closure, employment trends across all three employment categories remain relatively stable and centered near zero, indicating no systematic differences prior to a closure for counties that later experienced a closure and the comparison counties that did not. In the year prior to closure, manufacturing on average accounted for 20.6% of total employment in affected counties, underscoring its importance to local economies.

Figure 2 shows the change in manufacturing employment. At the time of closure, manufacturing employment drops sharply as expected. On average, manufacturing employment falls by approximately 20% within the first month following a closure and continues to decline over the subsequent months. By ten months after the closure, manufacturing employment remains more than 30% below its pre-closure level, indicating that the manufacturing industry continues to lose jobs, and those lost jobs are not quickly replaced in affected counties.

A line graph showing the percent change in manufacturing employment before and after a major plant closure. In the twenty months leading up to the closure, employment remains relatively stable, fluctuating within about one to two percent, before dropping sharply after the closure and falling by roughly thirty percent within the following year. Employment only fell by about one to two percent before falling just over thirty percent about ten months after closure.
Figure 2. Manufacturing employment after major food manufacturing plant closures.

Figure 3 reports the change in total employment. Total employment also declines following a closure. Over the first year after closure, total employment falls by approximately 6% relative to the pre-closure period. This pattern reflects the combined effect of direct job losses at the plant and broader adjustments in the local labor market. Employment does not recover within one year after the closure.

A line graph showing the percent change in total employment before and after a major plant closure. In the twenty months leading up to the closure, employment remained relatively stable before falling just over six percent immediately after the closure, and remaining at that level for at least the next ten months.
Figure 3. Total employment after major food manufacturing plant closures.

Figure 4 illustrates the change in non-manufacturing employment. Non-manufacturing employment is also affected by a food plant closure but with some time lag. Non-manufacturing employment remains relatively stable right after the closure, but it starts to decline three months later, reaching approximately 1.5% below its pre-closure level. Estimates from additional analysis in Hu (2026) indicate that food plant closure effects are greater in later periods, resulting in a 4% difference for the whole post-closure period. These patterns are consistent with spillover effects, as reduced household income and local spending following manufacturing job losses dampen employment in service-oriented sectors.

A line graph showing the percent change in non-manufacturing employment before and after a major plant closure. In the twenty months before closure, employment stayed relatively stable. Approximately three months after closure, non-manufacturing employment fell about 1.5% below pre-closure levels.
Figure 4. Non-manufacturing employment after major food manufacturing plant closures.

Taken together, the results in figures 2–4 indicate that large food manufacturing plant closures generate persistent employment losses that extend beyond the manufacturing sector itself. The sharp and sustained decline in manufacturing employment, combined with smaller but noticeable declines in non-manufacturing employment, underscores the role of major plant closures as community-wide economic shocks rather than isolated firm-level events.

In addition to overall employment losses, food manufacturing plant closures disproportionately affect workers who are heavily represented in the industry. In Midwestern counties, food manufacturing employs a substantial share of Hispanic and immigrant workers, particularly in meatpacking and meat processing. As a result, job losses following major plant closures tend to fall more heavily on these groups. Beyond employment, plant closures are also associated with changes in local population composition and some evidence of out-migration following job loss.4 

Discussion: Recovery, adjustment, and local responses

Major food manufacturing plant closures lead to sharp and persistent employment losses in affected counties. Without additional intervention or new investment, local labor markets do not quickly recover from large plant shutdowns. At the same time, experience highlights that some recovery is possible under certain conditions. In Perry, Iowa, for example, employment losses following the Tyson Foods closure have been followed by new investment, as JBS USA broke ground on a $135 million sausage production facility. This reopening will bring 500 manufacturing jobs back to the community and help stabilize local employment after a prolonged period of adjustment (Iowa Public Radio 2025).

This example illustrates that post-closure employment trajectories are not solely determined by the initial shock. Local recovery depends on factors such as new investors, the suitability of existing infrastructure for reuse, access to labor, and coordination between firms, local governments, and state agencies. Communities with large, specialized food manufacturing facilities may be better positioned to attract replacement employers when physical capital and workforce skills remain well matched to industry needs.

However, the experience in Perry also underscores that recovery often occurs with a delay and may not fully offset initial losses. Even when a facility reopens, job counts, wages, or job composition may differ from those prior to closure. As a result, the employment declines documented in this report should be viewed as meaningful and persistent in the absence of targeted recovery efforts.

The findings highlight the importance of policies that support both short-run adjustment and longer-run recovery following major plant closures. Workforce retraining, support for displaced workers, and efforts to repurpose existing industrial facilities may play a critical role in mitigating the local economic impacts of future food manufacturing shutdowns.

Footnotes

1. The data on layoffs come from the Worker Adjustment and Retraining Notification (WARN) database.

2. This article focuses on permanent plant closures and excludes temporary shutdowns that occurred during the COVID-19 period in 2020.

3. Comparison counties are chosen and aggregated using methods described in Hu (2026).

4. A more detailed analysis of population and demographic responses is provided in Hu (2026).

References

Blanchard, O. J., and L.F. Katz. 1992. “Regional Evolutions.” Brookings Papers on Economic Activity (1992)1:1-75.

Celli, V., A. Cerqua, and G. Pellegrini. 2023. “The Long-Term Effects of Mass Layoffs: Do Local Economies (Ever) Recover?” Journal of Economic Geography 23(5):1121-1144. https://doi.org/10.1093/jeg/lbad014

Hu, S. 2026. “Local Economic Impacts of Food Manufacturing Plant Closures in the Midwest.” Department of Economics, Iowa State University. https://drive.google.com/file/d/1bPeXn0B0YeGBUNQ8bYL2pIxppPsAUwXj/view

Jacobson, L.S., R.J. LaLonde, and D.G. Sullivan. 1993. “Earnings Losses of Displaced Workers.” American Economic Review 83(4):685-709.

Iowa Public Radio. 2025. “JBS to Reopen Former Tyson Plant in Perry.”

Moretti, E. 2010. “Local Multipliers.” American Economic Review: Papers & Proceedings 100(2):373-377.

Schulz, L., and J. Crespi. 2024. “Economic Impact of Perry Pork Processing Plant Closure.” Iowa State University Extension and Outreach, Iowa State University. Retrieved from https://www.extension.iastate.edu/agdm/articles/schulz/SchMay24b.html

Suggested citation

Hu, S. 2026. “Local Impacts of Food Manufacturing Plant Closures in the Midwest.” Agricultural Policy Review, Winter 2026. Center for Agricultural and Rural Development, Iowa State University. https://agpolicyreview.card.iastate.edu/winter-2026/local-impacts-food-manufacturing-plant-closures-midwest