Estimating the Economic Impact of the Virginia Boar’s Head Plant Closure

Estimating the Economic Impact of the Virginia Boar’s Head Plant Closure

By Kade Grafel, Research Analyst, Decision Innovation Solutions

Boar’s Head, a large producer of deli meats and other food products, has recently announced that it will close its facility in Jarratt, Virginia, following a listeria outbreak. 

While Boar’s Head will likely shift this lost production to other currently existing facilities or build a new facility to replace the lost production capacity, this closure will likely have a significant impact on the local economy. Jarratt, Virginia, had a population of just 652 according to the 2020 census. Other surrounding towns include Emporia (population 5,766) and Stony Creek (population 205). 

We can estimate this impact using IMPLAN. According to The Wall Street Journal, the Boar’s Head plant in Jarratt, Virginia, employed around 500 unionized workers, managers, and additional nonunion workers. With this information, we can make an impact estimate using an “industry employment” event with a value of -500 jobs for the meat processing industry in the area surrounding Jarratt (in this case, Greensville and Sussex Counties).

While having more input data, such as the facility’s total sales and/or its typical annual expenses, would greatly help to increase the accuracy of this estimate, knowing the number of employees is enough to get a rough idea of the impact on the local community. 

The table below portrays an estimated impact of the Boar’s Head facility closure. The initial loss of around 500 jobs is estimated to result in a further loss of 136 jobs from indirect (business purchases) and induced (employee spending) impacts.

The estimated loss to the local economy from this facility’s closure is 636 jobs, $26.4 million in labor income, $36.2 million in value-added, $8.8 million in taxes paid, and nearly $300 million in total sales (output).  

In conclusion, the economic effects of this facility’s closure will go far beyond the direct impact on the workers. Particularly given the surrounding area’s lower population, the effects of this decision will likely be felt strongly by local communities.