Meat Products Manufacture
Buy This Industry Report
Get more in-depth industry information with a First Research industry report containing business challenges, trends, executive insight, call prep questions, and so much more!
Increase Appointments
Engage Prospects
Build Your Confidence
Industry Overview
The US meat products manufacturing industry includes about 3,000 companies with combined annual revenue of about $130 billion. Large companies include Tyson Foods, Smithfield Foods, and Pilgrim's Pride. Tyson is the largest beef company, Smithfield the largest pork company, and Pilgrim's Pride the largest poultry company. The slaughtering segment of the industry is concentrated: the 50 largest companies hold 75 percent of the market. The secondary processing segment, meat processed from carcasses, is also concentrated: the top 50 companies hold about 65 percent of the market. Poultry processing is highly concentrated: the top 50 companies hold more than 90 percent of the market.
Additional information on the poultry industry is available in the Poultry Processing industry profile.
Competitive Landscape
Demand is driven by consumer income and by exports. Because meat is largely a commodity, the profitability of individual companies depends on efficient operations and an effective distribution network. Large companies have big economies of scale in production and distribution. Small companies can compete effectively in a local area or by producing unique products. The industry is capital-intensive: average annual revenue per employee is about $1 million.
Products, Operations & Technology
Major products are wholesale meat parts ("boxed" beef or pork) that will be cut or processed further, ground beef for commercial use, and "case-ready" (ready for supermarket display cases) items for retail use. The industry produces more than 25 billion pounds of beef products per year, and nearly 25 billion pounds of pork products. Veal production is more than 150 million pounds, while lamb and mutton production totals 180 million pounds. Annual poultry production (chickens, turkeys, and ducks) is 37 billion pounds.
Several distinct steps are involved in processing live animals into finished meat products. Live animals are typically bred and raised on individual farms until they reach a minimum size (50 pounds for hogs, about 500 pounds for steers, and about 6 pounds for chickens). They're then transported to feedlots (or feedyards) for "finishing," where they're fed high-quality grain feed mixtures until they reach their finished weight (250 pounds for hogs and 1,200 pounds for steers). The animals are then slaughtered and the "dressed" carcasses are either processed further in the same plant or sold to outside processors.
The economics of raising steers and hogs are dictated largely by the price of feed and by "feed efficiency," the rate at which feed is turned into weight gain. High-quality feeds for both steers and hogs are combinations of corn (mainly), soybean meal, and various additives. "Finishing" steers need 6 pounds of feed for 1 pound of weight gain, hogs only about 2.5 pounds of feed. Fed cattle are ready for slaughter at 20 months after birth, hogs at seven. Most beef packers don't produce their own cattle, but buy them from large feedlot operators. Some pork packers produce a large percentage of their own hogs, either on their own feedlots or through production contracts with independent farmers, who they supply piglets and feed to. Packers employ experienced animal buyers who make daily competitive purchases from feedlots, sales barns, and other supply points. Live cattle and hog costs are based on the expected yield (of usable meat) and quality (meat grade) of the animals, and on basic supply-demand considerations.
