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Pork packing: Just what is capacity?Pork packing: Just what is capacity?

COVID-19 presents obstacles that may linger.

Steve Meyer

October 5, 2020

1 Min Read
Semi truck hauling market hogs from a farm
National Pork Board

A fundamental challenge in determining the total capacity of the U.S. pork packing sector in 2020 is defining just what capacity is. My traditional question of "How many hogs can you harvest in a day if margins are good and hogs are plentiful?" simply doesn't address all of the constraints packers have faced in a COVID-19 world.

At the very least, the qualifier "if labor wasn't a constraint" was required this year. In some instances "if carbon dioxide availability wasn't a constraint" had to be added as well.

The first qualifier was necessary in just about every case. The second was more significant with sow slaughter plants where carbon dioxide is used to chill pre-rigor (i.e., hot-boned) product that is widely preferred for whole-hog sausage products. Among plants that reported enough labor to operate kill floors at optimal levels, many were short of labor on boning lines and in byproduct capture operations.

Packers were asked to provide capacity figures that fully incorporate any changes that have been made to accommodate COVID-19 prevention and control. Though these changes may not be permanent, they are in place today and will be so for the foreseeable future.

So, while this year's data represent a reasonable number of hogs that can be harvested by the physical facilities available, they overstate the actual number that can be harvested due to labor availability.

We invite you to take a look at the complete analysis of this year's pork packer capacity report.

About the Author(s)

Steve Meyer

Partners for Production Agriculture

Steve Meyer joins Kerns and Associates, Ames, Iowa. As Kerns team member, Meyer will be speaking, developing and delivering economic data and analyses, and working with our clients to provide critical perspectives as they benchmark and drive risk management decisions.

Previously, Meyer served as vice president of Pork Analysis for EMI. Meyer conducted ongoing analysis of hog and pork markets. In a former role, as president of Paragon, he also monitored and analyzed cattle, beef and poultry markets to meet the needs of his diverse set of clients. He served for 12 years as an author of The Daily Livestock Report sponsored by CME Group, an e-newsletter whose circulation grew steadily following its introduction in 2003. In addition, he writes a feature article for National Hog Farmer’s NHF Daily e-letter that focuses on economic issues in North America’s swine/pork sector.

Prior to founding Paragon Economics, Meyer served as director of Economics for the National Pork Producers Council and National Pork Board from 1993-2002. In that capacity, he provided economic counsel to producers and NPPC/NPB staff and coordinated staff and consultants’ activities regarding meat industry production and price forecasts and the economic impact of pork production and processing. He also administered NPPC/NPB programs dealing with marketing and pricing systems, industry structure, coordination and competitiveness. Since leaving the NPB staff, Meyer has served as the organizations’ consulting economist. In addition, he spent three years as an assistant professor in the agriculture economics department at the University of Missouri.

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