Tyson weighs sites for $320 million chicken plant after Kansas town objects

CHICAGO (Reuters) - Tyson Foods Inc TSN.N is weighing new sites for a $320 million chicken slaughterhouse after opposition from residents of a small Kansas town picked for the project, the chief executive said on Monday.

The Tyson logo in a file photo. REUTERS/Ross Courtney

The project planned for Tonganoxie, Kansas, would have been Tyson’s first new plant since the 1990s and included a chicken hatchery and feed mill, according to the company.

Tyson said it would increase its overall production capacity by processing up to 1.25 million birds per week.

However, residents were concerned about its impact on the environment and other issues.

“We’ll be delayed slightly here,” Tyson CEO Tom Hayes told reporters about the plant, after the company reported better-than-expected earnings.

U.S. per capita consumption of chicken is expected to hit a record high this year, according to the National Chicken Council, a trade group that said about 170 million chickens are slaughtered each week for meat.

Chicken sales have increased as consumers seek more protein in their diets. Some view it as a healthier alternative to beef and pork.

Tyson decided to build a new slaughterhouse because it was buying more chicken than it wanted from other producers to meet demand, Hayes said.

He declined to say when Tyson would pick a new site. The company had expected to break ground in Tonganoxie this autumn.

Prestage Farms, the nation’s seventh-largest hog producer, faced resistance from Mason City, Iowa residents over a pork processing plant last year. The company now plans to finish building its $240 million plant in Wright County, Iowa, next year.

States are contacting Tyson to be considered for its project, Hayes said. The company wants to gain a better understanding of how local residents feel about the plant when picking the site, he said.

Kansas has helped Tyson narrow its search in the state, according to the company. Tyson previously won support from state and local elected officials to locate the plant in Tonganoxie.

“I don’t know how in touch all of the officials were with what the direct local sentiment was for all of those in the local community of Tonganoxie and the surrounding area,” Hayes said.

Reporting by Tom Polansek; Editing by Cynthia Osterman