Beef packing finds balance
There are roles for all sizes of players in the beef packing industry.
Lee Schulz, BEEF Magazine
Jun 10, 2019
Schulz is the ISU Extension livestock economist.
In 1999, packing plants that slaughtered more than 1 million cattle per year slaughtered 19.9 million head, or 56.1%, of the federally inspected cattle slaughter (Figure 1). In 2018, plants with over 1 million head per year capacity slaughtered 18.4 million head, or 56.5%, of the FI slaughter. Their volume is down, and itís a stretch to characterize a 0.4% rise in market share over 20 years as a takeover.
The relatively small rise in market share by the giants suggests that smaller slaughter facilities, in aggregate, are maintaining market share. In 2018, packing plants that slaughtered between 1 and 9,999 head slaughtered 427,300 head, or 1.3%, of the FI cattle slaughter annually, 3.5% for plants slaughtering between 10,000 and 99,999 head, and 38.7% for plants slaughtering between 100,000 and 999,999 head. This compares to 1.5%, 4.4% and 38.0%, respectively, in 1999.
Packing plants of all sizes have important roles in the beef industry. Finding a role is all about responding to beef customer and consumer interests, and providing a constant supply of consistent, high-quality beef at competitive prices.†
Packing capacity trends
The U.S. has fewer FI cattle slaughter plants than it had 20 years ago. But the number has held relatively stable in recent years. In 1999, the U.S. had 759 FI cattle slaughter plants. Plant numbers bottomed at 626 in 2007 and 627 in 2012, before settling up at 663 in 2018 (Figure 2).†
In 2018, 72.7% of FI slaughter plants each slaughtered between 1 and 999 head annually, 15.2% slaughtered between 1,000 and 9,999 head, and 10.1% slaughtered between 10,000 and 999,999. Plants that each slaughtered over 1 million head only comprised 2% of the total number of U.S. FI cattle slaughter facilities. This compares to 73.0%, 14.4% and 10.7%, respectively, in 1999.
Packing capacity in line with supply ...
2018 red meat production record high ...
How USDA compiles slaughter data ...
more, including charts†