By Scott Calvert and Patrick Thomas | Photography by Terry A. Ratzlaff for WSJ

LEXINGTON, Neb. -- Wet concrete slid down the cement truck's chute, marking Ramon Prado's latest construction project in his adopted hometown. The 47-year-old entrepreneur says he has built and sold a dozen houses, and rents out several he owns. Now he is building four apartments on a quiet street near a cornfield.

Prado usually has a wait list for his rentals. But watching a crew smooth the apartments' parking lot, he faces new uncertainty: Will he find takers this time?

Lexington's economic engine is sputtering to a halt. Tyson Foods says that by Jan. 20 it will close its sprawling, 35-year-old meatpacking plant that has meant solid paychecks for 3,200 workers and transformed this remote community of some 11,000 people in central Nebraska. The news has ignited fears of economic devastation.

"It is going to be a struggle," Prado said. "At the same time, we can't just give up and shut down and leave."

America's largest meat supplier, Tyson, says it is shutting down the plant to cut costs. Years of ranchers shrinking their herds have pushed cattle prices to record highs, hurting meatpackers' profits and consumers' wallets. Tyson says its cattle costs rose nearly $2 billion last fiscal year. Meat-industry executives have long expected a major beef-processing plant to close, especially as they on average now lose about $200 per head of cattle.

Word of the closing, something many locals never considered, landed the Friday before Thanksgiving, plunging Lexington into crisis.

Plant workers, many immigrants and refugees, worry about finding new jobs. An exodus of residents would slash local school enrollment and the customer base for area businesses. Truckers, feedlot operators and cattle ranchers face hits to their bottom line without the Lexington facility, which slaughters up to 5,000 cattle a day.

Dawson County, where Lexington is located, stands to lose a quarter of its $2.2 billion annual gross domestic product, including 4,200 area jobs overall, according to estimates by Iowa economic-research firm Decision Innovation Solutions. The firm also projects a roughly $8 million drop in state and local sales-tax revenue.

Nebraska Gov. Jim Pillen said Tyson is considering using the plant to make refrigerator- case-ready meats for grocery stores, a pivot that would require only a fraction of its current workforce, he told The Wall Street Journal in an interview. Otherwise, he said, Tyson should sell the plant rather than leave it idle, as the company has following shutdowns elsewhere.

"I just told them, 'Look, if you don't do something with it, you've got to market it,'" the Republican governor said. "Thinking it's going to be mothballed is not an option."

A Tyson spokeswoman said the company is assessing how it can repurpose the facility. Tyson has said it would help employees apply for open positions at its other facilities and provide relocation benefits.

Joe Pepplitsch, Lexington's city manager for the past 25 years, is bullish on the city's long-term prospects, partly because of its labor force and the 600 housing units built since 2013. "There's a hell of a lot of positives here," he said. "How do we move beyond this?"

He says he thinks Tyson owes a debt to the city. "Cooperation means doing something with the community to help them get on a path to helping themselves out," he said, "instead of just packing up the U-Haul, slamming the gate, and saying, 'Good luck.'"

Already, for-sale signs are sprouting on front lawns, even as real-estate agents warn against a panic. Fifty-one homes were listed Dec. 13, up from 30 a month prior, according to Realtor.com, which is operated by News Corp, owner of the Journal.

A youth soccer club suspended travel, canceling plans to take part in a Las Vegas tournament. Some students in the English Language Learners program at Lexington High School don't know if they will return after winter break, said teacher Maria Aguirre. State and local officials have held a series of job fairs that, if successful, could send workers far away.

'We have our life here'

Lexington experienced a similar shock in 1985, when a combine factory went dark during the farm crisis. Five years later, the facility reopened as a meatpacking plant owned by Iowa Beef Processors, which Tyson acquired in 2001 for $3 billion.

The beef plant brought profound change to the town. When the plant opened, Lexington had 6,600 residents and was 5% Hispanic, census figures show. By 2000, its population rose to 10,000, half of them Hispanic, a share that now stands at 65%. Early arrivals included immigrants from Mexico and Guatemala, followed more recently by refugees from African countries including Somalia.

Meatpackers have long turned to immigrants to keep plants running, especially in Midwestern towns lacking enough workers for the often labor-intensive jobs, which typically pay between $20 and $30 an hour. In some plants, as many as 60 languages are spoken.

At Lexington High, doors bear signs in English, Spanish and Somali. Lexington schools Superintendent John Hakonson estimates nearly half the district's 3,200 students have a parent working at Tyson .

Some Tyson workers have already left. Sinai Savon Salazar, a 32-year-old Cuban immigrant, and her husband found jobs at the JBS meatpacking plant about 90 miles east in Grand Island, Neb., and expect to move soon.

"It's sad to have to leave behind a whole life that I had built here," she said. "Unfortunately, we have to move on."

Salazar hugged her friend, Yolanda Escobar, goodbye. That same day, Escobar left the Tyson plant for the last time after 18 years, she said, cheered by teary colleagues who banged meat hooks on metal tables in appreciation.

Escobar, 45, landed a job at Sustainable Beef, a plant that opened in June in North Platte, Neb., an hour west on Interstate 80. She plans to commute so her two teenage daughters can finish high school in Lexington. Escobar, a native of Guatemala, shares her children's desire to stay put.

"We have a house here, we have our life here," she said. "This is my community."

The new job means an initial pay cut, from $24 an hour to $22, and the commute means missing her girls' athletic events after school. One wild card: Her husband is a 30-year plant employee. If Sustainable Beef doesn't hire him, too, the family might have to move 165 miles east to Lincoln, Neb., where Escobar has family.

Ripple effects

David Briggs, Sustainable Beef's chief executive, said its plant received more than 100 applications the day after Tyson's announcement. Briggs plans to capitalize on his rival's closure by boosting Sustainable Beef's slaughter capacity next year to 1,800 head a day from 1,500, and will employ 1,000 people, about 100 more than originally planned. Briggs said Sustainable Beef is working with the state to potentially bus workers from Lexington to North Platte.

Jarrod Gillig, head of Cargill's beef operations, said his plant managers were in Lexington in early December to recruit experienced meatpacking workers. The company is considering offering relocation assistance to move people to towns such as Fort Morgan, Colo., or Schuyler, Neb., where it has plants.

Ahmed Abdalla, a refugee from Sudan, said he would move for work. "Anyplace there is [a] job, I'm ready to go," he said. Abdalla, 43, said he and his wife both make $22 an hour at Tyson as packagers; they have three young children.

The Tyson plant's closing is bad news for Lexington native Mike Maloley, whose trucking business hauls livestock and other materials to the plant and cleans cattle trucks.

Maloley estimates he will lose at least 20% of his business. Instead of multiple 20- to 50-mile daily hauls to the nearby Lexington plant, Maloley's trucks will have to drive to slaughterhouses as far away as Colorado, some 300 miles away.

"It's going to be devastating," he said. "There's a lot of good people in this town."

Karla Barrios, 41, doesn't work at the plant, but it shaped her life. Like many Lexington residents, it is why she moved here from El Salvador at age 14, when her mother worked at Tyson. Barrios's husband, Eber, has worked there since 2018, often putting in 70 to 80 hours a week so they could save enough to build a home in 2022.

"That was the only place that he could make all that money for us," Barrios said of Tyson. They are determined to remain. The couple has two young children and last year she opened a cafe, La Esquina.

"We're thinking, OK, it's actually an opportunity to do something else," she said, adding that her husband is eager to learn a new trade. "We're confident and we're hopeful, too, that the town will not die."

The closure will have an enormous impact on the region's thousands of ranchers and feedlots. Nebraska -- where cattle outnumber people 3 to 1 and one in four jobs is related to agriculture -- has a huge beef industry. The state leads the nation in cattle slaughter, killing about seven million a year.

Jake Wolfinger has for years loaded trucks with the 5,000 cattle on his feedlot for the seven-mile trip to Tyson's Lexington plant. He and the other neighboring feedlots and ranchers in Dawson County depend on Tyson as the closest buyer for their livestock.

He compared Lexington's closing with the Rust Belt cities his family knew in Ohio. When plants shut down, whole towns would hollow out. He fears the same fate awaits Lexington.

People in Lexington hope Tyson will retrofit or sell its plant. When times are tough, meatpackers historically close facilities and keep them idle for years rather than sell to a competitor and cede market share. Since acquiring IBP in 2001, Tyson has closed a number of beef plants that never reopened, including in Norfolk, Neb., and Denison, Iowa. Tyson's Emporia, Kan., plant, initially slated to close in 2008, continued operating with fewer workers then closed for good this year.

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