SIOUX FALLS, SD – In a move poised to reshape the economic landscape of Sioux Falls and the wider state of South Dakota, Smithfield Foods announced its plans to relocate its primary processing facility from its long-held downtown location near Falls Park to Foundation Park, situated northwest of the city near the Amazon packaging facility. The announcement, made jointly by South Dakota Governor Larry Rhoden, Sioux Falls Mayor Paul TenHaken, and Smithfield CEO Shane Smith, signals a $1.3 billion investment and a commitment to a new, state-of-the-art facility.
The decision marks the end of a 115-year presence for Smithfield – originally John Morrell and Co. – in the heart of Sioux Falls. The company, now the world’s largest pork producer and owned by Chinese-based WH Group, intends to begin construction on the new plant in the first half of , with operations expected to commence in . According to Smith, the relocation represents “a generational, win-win solution” for the company and the community.
Governor Rhoden framed the investment as the largest in the state’s history, emphasizing the critical role of agriculture in South Dakota’s economy. “Ag is king in South Dakota,” he stated, adding that the success of the agricultural sector drives the state’s overall economic prosperity. The move is expected to bolster the state’s agricultural output and create new opportunities for growth.
The existing 80-acre site near Falls Park will be redeveloped into “The Sanford District,” a project Mayor TenHaken described as a “once-in-a-generation opportunity.” The Mayor acknowledged that the deal had faced potential collapse, a scenario he warned would have been “devastating” for the city. He drew a parallel to a recent plant closure in Nebraska, estimating that such a closure would result in a $3.3 billion annual loss in economic activity, according to a University of Nebraska study.
A key element in securing the deal was the involvement of philanthropist T. Denny Sanford, who agreed to purchase the land for the new plant at a cost of $50 million and subsequently donate it to facilitate the project. This contribution underscores the importance of private-public partnerships in driving significant economic development initiatives.
Smithfield Foods currently employs nearly 3,200 people at its Sioux Falls plant, with an annual payroll of $200 million. The company produces a wide range of packaged meats and fresh pork under brands including Eckrich, Farmer John, Kretschmar, Curly’s, and Nathan’s Famous, having recently acquired all outstanding shares of Nathan’s Famous for $450 million.
The new facility, described as “the nation’s most modern, technologically advanced fresh pork and packaged meat facility” by CEO Shane Smith, will be highly automated. This investment reflects a broader trend within the food processing industry towards increased efficiency and technological integration. The move also allows Smithfield to consolidate operations and optimize its supply chain.
The relocation is not without its implications for the downtown area. The departure of a major employer and industrial presence will necessitate a careful and strategic redevelopment plan for the Falls Park neighborhood. The creation of The Sanford District aims to transform the area into a vibrant mixed-use space, potentially attracting new businesses, residents, and tourists.
The decision by Smithfield Foods to remain in Sioux Falls, albeit at a new location, is a significant vote of confidence in the city’s economic climate and workforce. The state’s “Open for Opportunity” ethos, as touted by Governor Rhoden, appears to be bearing fruit, attracting substantial investment and solidifying South Dakota’s position as a key player in the American agricultural landscape. The long-term impact of this investment will be closely watched, not only by residents of Sioux Falls but also by observers of the broader trends shaping the future of food production and economic development in the United States.
The scale of the investment and the involvement of key figures like Shane Smith and T. Denny Sanford highlight the complex interplay of corporate strategy, government policy, and philanthropic contributions in driving major economic projects. The successful negotiation of this deal underscores the importance of collaboration and a shared vision for the future of Sioux Falls and South Dakota.
