Small meat packing plants disappearing

By Marilyn Bay Wentz

Much attention has been paid to concentration in the meat processing industry. Mergers and acquisitions over the last two decades have resulted in over 80 percent of all beef processing being handled by just four multinational firms.

At the other end of the spectrum, however, is an equally disturbing trend. Over the last two decades, the United States has lost an estimated 50 percent of its small to medium-sized processing facilities. These facilities range from very small shops that process less than five head per week to those that process 100-500 head per week.

The loss of these plants in local communities eliminates a main street business that employs people, pays taxes and makes purchases. It also means that producers who want freezer meat for themselves or others must travel further to find a processing facility.

The lack of medium-sized USDA-inspected meat processing facilities also is a problem for farmers wishing to form meat marketing cooperatives. This was the dilemma several years ago for Pennsylvania Farmers Union when a group of producers decided to establish production and carcass criteria and to market steaks to local restaurants. The cooperative was fortunate to find Gary Greg, an entrepreneurial meat processor who owned Eighty-Four Packing Company, Eighty-Four, Penn. His plant each week processes 200-220 lambs and goats, along with 10-12 cattle and some hogs.

Located in the Pennsylvania producers’ area, Greg’s facility is USDA inspected. It is large enough to handle the additional work, yet small enough to provide producers with detailed carcass data upon which they can make genetic choices for their herds. The facility does custom, portion cutting for area restaurants, which promote the beefsteaks as locally produced by family farmers and free of hormones, animal by-products and medicated feeds. In addition, Eighty-Four Packing Company has a commercial kitchen, which enables the cooperative to produce and deliver to retailers a prepared “Yankee Pot Roast” from the chuck and other cuts not used by the restaurants.

Yet, despite Greg’s innovations and hard work, he says making his business profitable is not easy.

“The meat industry needs volume to survive,” Greg said. “Three percent of 50 animals is a lot less than 3 percent of 5,000 animals processed by a company the size of IBP, yet we must meet the same standards as they do.”

Greg concurs that half or more of the medium to small packers in his area have closed their doors since 1980. “The biggest decline, by far, has been in the last four years since USDA’s new Hazard Analysis of Critical Control Points (HACCP) system was instituted,” he said.

He doesn’t blame anyone or believe special assistance or laws for smaller packers are justifiable. “It’s just a sign of the times,” Greg says. “Consumers want low prices, one-stop shopping, convenience and lots of restaurant meals.”

Despite his pessimism on head-to-head competition with the “big guys,” Greg believes he has found a niche in kosher and halal (Moslem) slaughter. Here the profit margins are better. He also processes roasted pigs, which he sells direct to the public.

Steving Meats Company in Kersey, Colo., is one of just a few of Colorado’s small USDA-inspected plants. The facility typically processes eight cattle and 15-18 hogs per day.

Being USDA inspected entitles owner Jay Archer to sell meat directly to the public, which he seldom does since he believes it could create suspicion with his custom processing customers. He does, however, buy carcass meat from nearby Monfort (owned by Con Agra) and resells it to restaurants.

“I believe the USDA inspection status is good for the consumer, and my plant can comply,” said Archer, who purchased the plant five years ago.

“My business is maxed out,” Archer said. When asked if he plans to expand, he said: “No, it would not pay, not in my lifetime anyway.”

LeRoy Monsees, who owns and operates Your Choice Meats in Wiggins, Colo., represents Colorado’s typical small meat processor. He runs a quality, albeit not inspected shop, mostly for area residents who want meat for their freezers. He processes about 20 cattle and 20 hogs per week.

His plant was originally built to USDA standards, but he estimates it would take about $80,000 to bring it into compliance with the new HACCP standards. Along with Archer, Monsees says he would not soon be able to recoup the investment.
Like Greg and Archer, Monsees says it takes extremely hard work and long hours to make money in his business. Monsees also mentions the difficulty getting workers. He needs seven employees to run his plant.

“I can match a big packer like Monfort on wages but not on benefits,” Monsees said. “Right now I have a really great crew, but I do worry about what will happen if people leave.”

Rocky Mountain Farmers Union supports the small packers represented by the three profiled here. Their experience and difficulties parallel those of independent producers. Small packers are crucial to support the growing niche markets of consumers desiring locally-produced natural foods.