It’s been nearly three years since the Tyson Holcomb plant fire upheaval, and right on the heels of that, its ugly stepsister – the coronavirus. Between the two, the resulting beef pricing, marketing and placement patterns are still fresh on everyone’s minds. These events only amplified the discussion surrounding the need for, and feasibility of, beef packing capacity expansion.
Since then, there have been several announcements of plans to construct, expand or even convert pork facilities across the U.S. And one such project – True West Beef – is taking shape right in Progressive Publishing’s backyard.
Amid all the supply chain issues, Rabobank’s RaboResearch Food and Agribusiness group issued a report in 2020 that said there is room for expansion in the U.S. In fact, they found that the industry could accommodate an additional 5,700 hooks per day of processing capacity, or about 1.5 million additional head per year.
So where does packing capacity stand now?
To better visualize how many larger facilities (500 head per day or more) have come online or have announced plans to begin construction, the Progressive Cattle team put together an infographic using company press releases and news coverage. This map shows where these facilities are being built, the capacity, and the estimated investment and completion date. The challenge in creating this graphic, however, was in the last portion of the information: the projected completion date.
While project announcements continue to be made, current events are causing some hesitancy and pause in the industry. Therefore, the completion dates listed are the last known projected dates. Labor, as we all know, continues to be a significant issue across the board, as well as indicators of U.S. cow herd liquidation.
Some have also reportedly run into hurdles such as American Foods Group (AFG), which announced plans in 2021 to construct a new 2,400-head-per-day facility in east-central Missouri but have since received local resistance. According to the Warren County Record, nearby residents have raised concerns about potential impacts on area traffic, odor and water quality.
On the flip side, a big announcement came earlier in June when Kingsbury and Associates and Sirius Realty unveiled their plan to construct an 8,000-head-per-day beef and bison processing facility in Rapid City, South Dakota, over the next three years. This would make it the largest beef plant in the country and is expected to cost $1.1 billion.
In the 2020 report, Rabobank analysts explained, “… the capital depth and longevity required to build and maintain a new plant through its first cattle cycle precludes most would-be investors from considering such a project. That’s not a recipe for thin capital or weak of hearts.”
While it remains unsure if and how many of these completion dates will be impacted, it is something to watch as the rest of the year unfolds. Plans could change as the industry gets a pulse on just how big cow herd liquidation will be.
