The new Prestage Foods of Iowa plant in Eagle Grove, Iowa, houses some of the most advanced hog processing technology available, but what makes the new facility even more special lies in the diverse management team and attention to employee satisfaction.
“It’s a people business,” says Terry O’Rourke, general manager and vice president. “Regardless of what your background is, what your education is, what your abilities are, there’s a place here for you. It’s finding the right person, for the right place at the right time.”
Prestage Foods of Iowa, a new company under the Prestage Farms Inc. umbrella, began killing hogs under US Dept. of Agriculture (USDA) inspection on March 4, 2019. On that day the 700,000-sq.-ft. facility killed 525 hogs, representing a beginning and an end.
Construction began in the spring of 2017 and “…was painful,” says Ron Prestage, DVM and president of sister company Prestage Farms of South Carolina LLC. “Mother Nature was not real kind.”
Thick bedrock more than doubled the time it took to install the first of two almost 2,000-ft.-deep wells while untimely rains and a typically harsh northern Iowa winter created a challenging environment for achieving construction goals. Prestage says these hinderances are to be expected on such a massive undertaking, but credits Epstein, builder of the epic Wright County project, for its tenacity and professionalism throughout the construction phase.
“They hung in there with us and we got the thing built,” he says.
Chicago-based design-build firm Epstein services many industries, meat processing being a large one. In the last 18 months, Epstein has built two of the three largest packing plants in the US. The company’s reputation is based on its knowledge, ability and expertise in building meat processing facilities.
“We felt like they were the most experienced at building the modern new design, which is a very clean, straightforward flow of product, all one-story plant,” says Jere Null, CEO, Prestage Foods of Iowa. “We felt like Epstein would be astute to that. They have expertise in food engineering and building food plants, so we selected them as our general [contractor].”
Prestage Foods and Epstein collaborated on the design of the building and Temple Grandin, Ph.D., consulted on the livestock handling and barn design. The $300 million-plus plant sits on 160 acres with a cut floor that covers 100,000 sq. ft. Product travels through the plant on over five miles of conveyor belting and freezes in 20,000 sq. ft. of freezer space with an option to convert another 6,000 sq. ft. to freezers.
The Prestage team had to be flexible during the building process, first changing its original plans to open in November 2018 to January 2019. They felt November wasn’t right due to it being so close to the holidays and hiring new people through Thanksgiving, Christmas and the New Year would cause too many hiccups in the process. When January 2019 rolled around, they still didn’t feel the plant was ready.
“I think the worst thing in the world you can try to do with a new labor force is try to start up prematurely,” Prestage says. “So, we postponed the startup until we thought we were actually able to do it and give ourselves a shot at doing it the right way instead of being in a hurry and doing it wrong.”
Prestage describes the end of construction and that first day of killing hogs as both exciting and terrifying. While Epstein, the subcontractors and a crack team from Prestage Foods completed construction and ran the first animals through the line, maintenance needed to tune technology and machines, and HR needed to staff positions throughout the company as volume will increase until first shift hits capacity: 10,000 head per day. All those things mixed with the fact that Prestage, as a company, has traditionally produced hogs and doesn’t really have any experience with running a pork processing plant, meant the second phase of “construction” had just begun.
When it came time for Null and Prestage Foods of Iowa to put together the executive team, Null knew he wanted a diverse team in terms of where executives might have spent the bulk of their career before coming to Eagle Grove. Prestage Foods boasts executives and upper management from almost every protein company in the United States.
“Our chief engineer came out of Tyson IBP. I came out of Smithfield. Head of HR came out of Perdue. Our animal handling guy is from Hormel. Quality Assurance is from Farmland Foods. We’ve got JBS people in our mix. We’ve got a lot of Seaboard people as well,” Null says. “We really do believe that we put together an excellent team from several backgrounds.”
Null admits management of such a diverse crew presents challenges at times, but still believes the range of different ideas and the compromises and solutions that come with those different views of the way things should run are worth it.
“It was engineered by design in that we went out and tried to identify skill sets, tried to build a diversity of thought into this and come up with what we believe is going to be the best operating and finest plant in the country,” Null says.
With the executive team in place and the plant starting to kill animals, to reach the 10,000 head per day capacity, Prestage Foods of Iowa needed to start hiring employees to fill all the roles necessary for production. It also wanted to limit turnover as much as possible by creating an environment, schedule, pay scale and benefits package that would retain employees.
As of early April, the plant was onboarding 85 to 100 people every Monday. Employees come from the four-county area surrounding Prestage Foods that it committed to from the beginning. Fort Dodge, Eagle Grove, Webster and other outlying areas within those four counties provide employees to the new plant.
“We don’t anticipate continuing to onboard 100 people every single Monday forever,” says Pamela Webster, director of human resources. “In this industry there is turnover. We anticipate having a stable workforce and ultimately that number is going to cascade down once we get a good, stable workforce. We are experiencing some turnover, but not tremendous turnover. So, we’ll continue to hire from the area.”
Webster and her team’s strategy to hire the workforce at Prestage Foods consisted of a multi-pronged approach. The HR department put together a billboard campaign placing 16 units within a 30 minute and an hour commute from the plant. The duration of the plant’s construction played a large role in the billboard campaign.
“When we created a strategy for our billboard campaign to drive people to our website, to see the jobs that we had, we really leveraged the fact that everybody was talking about the facility that was being built for two years,” Webster says. “On the billboards that went out were pictures of the plant built and they read, ‘The wait is over apply now,’ and it drove them to the Prestage website.”
For face-to-face and word of mouth recruitment, Prestage Foods of Iowa used National Manufacturing Day to set up a month’s worth of meet and greets, one in each targeted county for a total of four throughout the month. Key members of management, Webster’s staff, the general manager and various production team managers set up recruiting stations in each county. Prestage Foods invited people from each community and showed potential employees images of the completed plant and where hogs would come in and product would go out and personal protective equipment (PPE) among other things.
“We did a lot of kind of grass roots educating people about what the company was all about and I think as they got to know us and some of the key people and realized that – hey the vice president or the general manager is down there, you can talk to him, or you can talk to the CEO, you can talk to the director of HR, and you can talk to the production people, you can ask whatever question you want to ask,” Webster says. “A lot of people just realized they [upper management and executives] are pretty approachable and they’re pretty transparent.”
“The ability to hire management, supervisors and all that, has been easier than we thought,” Null says. “On an hourly situation, so far, so good. We’re not up to our full numbers yet, and we certainly haven’t started thinking about, ‘Are we going to have the ability to staff a second shift yet?’ So far we’ve been very pleased with the applicant flow, largely local people.”
Attention and retention
The processing industry historically sees a lot of turnover of hourly wage employees. There are various reasons for the high turnover, but Prestage Foods strives to create an environment to limit turnover significantly. A quality benefits package and high wages and most weekends off help to ensure employees see the company as a good career and future.
“We’re paying $16 an hour and up. When you look at an opportunity to make more an hour, get overtime, have most of your weekends off, get health insurance and a paid vacation, we’re not an unattractive looking place to check out,” Null says. “So, what we have to do is make sure you’re treated right, you’re treated with respect. When we tell you that we’re going to look after you, we do, and we build a bond. That’s how the company retains people.”
One of Webster’s first tasks after moving to the Eagle Grove Iowa pork plant was to assess the benefits package and compare it both to the competitive industry and local Iowa industries. She and her team made recommendations to Prestage Farms headquarters in North Carolina and the company made some tweaks that made the company more attractive to employees.
“Certainly you’re going to hire some people that try that job for a few weeks and then decide that it’s not for them. That’s not going to surprise us at all, but overall we’re very pleased with the retention we’ve had of the people that started up with us on day one.” — Ron Prestage
“We actually decreased the employee contribution with our health care plan, which is unheard of,” Webster says.
Prestage Foods was able to increase the life insurance benefit for employees and add dental and vision benefits to the medical plan. While the medical plan at the new plant already measured up against other plans in similar industries, the new changes took it up another step.
“We get a lot of feedback from employees regarding our medical plan and how competitive it is,” Webster says. “We’re happy with that.”
Ron Prestage says the company has always dealt with the competition for labor, but it has never changed its approach to hiring and retaining employees. The company tries to hire good people from the start and then treats those people well in order to keep them. Some colleagues told him to expect an extremely high turnover in the first few months of operation, but Prestage says that’s not been the case with the new pork plant.
“Certainly you’re going to hire some people that try that job for a few weeks and then decide that it’s not for them,” Prestage says. “That’s not going to surprise us at all, but overall we’re very pleased with the retention we’ve had of the people that started up with us on day one.”
While Prestage Foods of Iowa approaches the sparse labor market with a solid strategy for acquisition and retention, it employs another strategy with equal effectiveness, but from a different angle.
Automation allows the Eagle Grove, greenfield plant to operate with less manual labor. Prestage Foods of Iowa, the Prestage family, Epstein, Null and his team have taken the largest collection of meat processing technology and built a state-of-the-art facility around it.
The animals come from lairage consulted on by Temple Grandin and enter the elevator to be lowered into the pit for CO₂ stunning. To save water and put less heat and stress on the animals’ skin, Prestage Foods uses vertical scalding. This also keeps the animal cleaner as the water is filtered, as well as not using a common bath.
On the kill floor of the plant, large Marel-designed robots open the carcasses with an efficiency and consistency impossible for humans to duplicate. Every time the arm opens an animal the blade needs to be sanitized. Each robotic arm carries two sets of blades and breakers. The arm spins the just-used blade back into a housing for automated clean-in-place sanitation, while another blade comes out of the housing sanitized and ready to open the next carcass in line.
The animal moves to the next station where robotic arms automatically drop the head. Newer to the industry are robotic split saws. One of the harder and more dangerous jobs on the floor, the automatic split saw removes the need for a person to perform this demanding task.
“Automatic loin pullers, automatic rib pullers, which are very new in the industry, and water jet cutting on bellies, the industry is moving in that direction.” — Jere Null
“These are all based on vision. High-speed cameras take pictures of the animals and tell the computer exactly where to go down and then the robotic arm goes down and does the task and finishes up,” Null says.
At the end of the kill and split, automatic touch-free controls load carcasses onto the cooler rails. No hand prints on pigs and no bacteria spreading from pig to pig by human hands creates a consistently cleaner and higher quality meat.
On the cut floor, vision assist ensures accuracy on ham and shoulder cut off. High-speed imagery of the carcass informs the saw and instructs it to move back and forth accordingly. The saw then cuts the meat consistently and perfectly every time, something a human and a laser light is unable to do.
“Automatic loin pullers, automatic rib pullers, which are very new in the industry, and water jet cutting on bellies, the industry is moving in that direction,” Null says. “So, quite a few vision assisted machines on the cut and the kill that are making either high precision cuts or taking away a very laborious and dangerous job.”
For Prestage Foods’ customers, the automation and technology provide a consistency and uniformity of finished product. This consistency helps the plant’s customers create higher yields from a more dependable and uniform product.
“That’s what you sell the customer,” Null says.
For the plant itself, attracting labor is more difficult than it was in the past, and robots don’t have bad days or miss work. Facilities still need labor, but now they need maintenance personnel with two-year electronics degrees, machine operators and engineers rather than people with just a strong back.
“A plant built in the late 1980s doing the same thing this plant would do, would probably have 200 more people in it than this plant,” Null says. “That’s the labor savings of better design, better automation, better flow. A lot of that is these robots, but a lot of that is also that we’ve learned just to build a better design through the plant.”
As of April 3, Prestage Foods of Iowa employed 638 people and killed approximately 3,500 head a day. Null projects to steadily increase production by 200 to 300 head per week until the plant reaches 10,000 head per day on a first shift. As production numbers go up, so does the number of employees. The projected number of employees for first shift 10,000 head per day is between 940 and 980.
“If we went to second shift, which this plant is capable of doing, it’s built to be a two-shift operation, when we do that, the number will go up and start exceeding that by the number of production and maintenance that we’d hire for another shift,” Null says. “A second shift will be at least two years out.”
Null says a second shift depends on a stable labor force and an established base of sales. Once those two variables plus high quality levels are in place, the plant will move more deliberately toward a second shift.
The raw meat production of Prestage Foods will go primarily to retail, 55 percent of production, and further processing companies, 45 percent of production.
“Of the total processor and retail, we believe this plant will export up to 30 percent of its product out of the country,” Null says. He adds that those exports will come from both further processing and retail channels.
Prestage Foods of Iowa built the Eagle Grove plant with a long-term vision and intends the plant to operate at optimal levels for five decades or more. The local community is important to the company for its longevity, but the company and its ownership and executives also understand that giving back is just the right thing to do.
Two years ago, Prestage developed a community advisory panel made up of local stakeholders from the community and surrounding areas. The board members help Prestage Foods understand the areas of the community in need of help.
“If there are any community concerns or misunderstandings about our company, they help us work through that kind of stuff and they actually control part of our budget for giving,” Null says. “Projects come to us and they get involved in the decisions of the best projects to give company money to. So, we’re very involved in the community that way.”