FARMLAND FOODS INC.

FARMLAND FOODS INC. Designated as the #1 smoked ham processor in the United States based on total volume, Farmland Foods was a subsidiary of Farmland Industries, the largest agricultural cooperative in the United States in 1997.

The future of FDL FOODS INC. in Dubuque was sealed in July, 1995 when Hormel Foods Corp., FDL's only customer, would stop purchasing fresh pork from the company in September. Officials of FDL announced the closing of its hog slaughter, laying off of half of its work force, and a search for a buyer. (1)

It appeared that Farmland Foods was an ideal choice. Mayor Terry DUGGAN, City Manager Michael VAN MILLIGEN in a meeting with Robert Henry WAHLERT discussed the city acquiring 15 acres from FDL in exchange for a reduced interest rate on the company's $3.05 million loan with the city. Wahlert, however, wanted to offer the land to the company. The city council agreed to restructure the loan if Farmland agreed to pay production workers a base wage of $9.25 per hour. Six days before FDL laid off 925 workers, Farmland pulled out of the deal. Reasons later learned included Farmland's environmental concerns about the land and two years of financial loss due to start-up and retooling costs. (2)

Early the following week, FDL and Iowa Beef Processors (IBP), Inc. signed a letter of intent for IBP to purchase the plant. Reaction to the announcement was swift. Union officials expressed their belief that IBP purchased the plant it would rehired all the workers at a lower wage without retention of benefits. IBP officials acknowledged the decision of which operations it would continue had not been made. (3)

Concerns about the reputation of IBP for low wages, led to efforts to reopen negotiations with Farmland and lawsuits from IBP best addressed in Kathy Bergstrom's article "The Art of the Deal."

Farmland’s purchase of the FDL plant in Dubuque came as good news to the community. INTERSTATE POWER COMPANY had seen its usage drop 40% with the closing of the plant. Between $350,000 and $400,000 had been lost of the wastewater treatment general fund that supported the operation of the wastewater plant and sewage system.

Farmland received a package of $18.65 million in state, county, and city loans to assist in the renovation of the facility in addition to utility company grants and job-training money. (4) The City of Dubuque agreed to purchase nineteen acres of FDL property and to indemnify Farmland from possible environmental problems on that land. The city, FDL, and Farmland also signed an agreement indemnifying Farmland from lawsuits brought by IBP Inc. that had been in negotiations to purchase the Dubuque meatpacking company.

In September 1996, the kill and cut operations were reopened. Farmland representatives announced that they expected a first-year payroll of over $40 million with expenditures of $6.5 million in the community for services and supplies. (5) In October 1996, the plant had an estimated 1,100 production employees with fewer than 100 remaining to be recalled from layoff. By December 1996 Farmland announced that employment had reached 1,350.

An unexpected consequence of the rebounding economy was a sudden increase in Bosian citizens. Recruited for work at the IBP plant in Waterloo, as many as 50 Bosnians, speaking little English, relocated to Dubuque. The DUBUQUE COMMUNITY SCHOOL DISTRICT with only forty English as a Second Language students previously had to hire one more instructor and an aide. (6) Bosnian students fluent in English were often called from class to the school office to translate between staff and parents. (7)

Smithfield Foods, the world's largest hog producer and processor, purchased on June 8, 2000 putting over 1,100 people out of work. At the time, John Morrell & Company, a subsidiary, stated its intention to invest $100 million to refurbish and reopen it. This never occurred. (8)

The buildings sat empty until 2004 when local developer Wayne Briggs announced plans to tear down the buildings and construct a shopping center. On March 21, 2005 the city council approved the rezoning. By October 1, 2006 the demolition of the plant had been completed.

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Source:

1. Bergstrom, Kathy, "The Art of the Deal," Telegraph Herald, April 14, 1996, p. 1

2. Ibid.

3. Bergstrom, Kathy, "IBP Interested in FDL," Telegraph Herald, September 28, 1995, p. 1

4. Bergstrom, Kathy, "Farmland Faces the Future," Telegraph Herald, July 2, 1996, p. 1

5. Bergstrom, Kathy,"Significant Impact Expected from Farmland's Opening," Telegraph Herald, September 22, 1996, p. 1

6. "Bosnian Workers Come to Dubuque," Telegraph Herald, December 23, 1998, p. 7

7. Randy Lyon, former fourth, fifth and sixth grade teacher at Hoover Elementary School

8. Kittle, M. D., "One Year Later, Plant Still Vacant," Telegraph Herald, June 8, 2001, p. 41