OPINION: Farmers Need More Meat Processing Options

For Pennsylvania rancher Michael Kovach, the lack of slaughter facilities near his farm has been a burden for many years.

Kovach sells his pork, beef, lamb and chicken onsite at his own farm stand. But before he does, he has to send his animals to a state-inspected facility to be processed. While the cattle, sheep and hogs can be processed just 30 minutes away, his hens travel around two-and-a-half hours each way. The long drive isn’t just an inconvenience for Kovach—it’s also less than ideal for the chickens, who can experience stress during transportation. Ultimately, this can affect the quality of the final product, which, in addition to the added cost of fuel to get back and forth, can cut into a rancher’s bottom line. 

What worries Kovach most, however, is the possibility of his closest processing facilities closing, either temporarily or permanently. The next closest plant is at least six hours away, and it isn’t clear if it would even be able to find the time to process his animals. Facilities are often booked months in advance, which means last-minute requests can be extremely hard to accommodate. The backlog would force Kovach to find more space and feed for his animals. The longer they grow, they may lose value and suffer a lower quality of life.

Kovach certainly isn’t alone in these concerns. Even as meat production has grown over the past several decades, thousands of small-scale meat plants have gone out of business, leaving just a handful of large plants to process the majority of our meat supply: for instance, just 50 plants account for about 98 percent of all beef slaughtering and processing nationally. These plants are owned by an even smaller handful of corporations; 85 percent of the beef market is controlled by just four firms, up from 25 percent a mere 43 years ago. This rapid consolidation has resulted in a severe shortage of regional meat processing infrastructure across the country, forcing most American farmers and ranchers to transport their livestock untold hours every month, with few alternatives if things go sideways. 

Unfortunately, over the past seven months, things have gone sideways—more so than Kovach and his fellow ranchers might have ever expected. During the pandemic, at least 508 meatpacking plants have reported confirmed cases COVID-19, representing about one-sixth of the nation’s plants. Dozens of these plants temporarily slowed or halted production to get outbreaks under control, substantially limiting the country’s meat processing capacity.

At the peak of these closures in late April, pork production was down 25 percent and beef production was down 10 percent, bearing out many of the fears ranchers had about possible disruptions. Though most were able to avoid the worst-case scenario of euthanizing entire herds of animals, the cost of holding onto animals longer and the time required to find back-up slaughter plants certainly took a toll on many producers. 

The meat plant closures were bad news for consumers too, who were confronted with brief meat shortages and higher prices. Though production has mostly returned to normal, consumers are still paying substantially more for beef, pork and poultry—a fact that would be alarming in any year, but is especially so now as millions cope with unemployment and food insecurity.

To date, the coronavirus pandemic is the most significant disturbance the meat industry has dealt with, but there have been several other instances where high levels of concentration have left farmers and consumers in a bind. For example, last year, a facility responsible for slaughtering 5 percent of all US beef, shut down after a fire damaged the building. In the following weeks, ranchers earned less for cattle while consumers paid more for beef. More recently, the possible closure of the nation’s second largest lamb processing plant could strand producers with nowhere to process their livestock. Inevitably, future crises—climate change, another pandemic, or who knows what—will shock this fragile system of carefully stacked Jenga blocks, bringing down the entire meat supply chain with it.

Fortunately, we have the tools and information we need to prevent that from happening. To start with, the Department of Justice, the Federal Trade Commission, and the Packers and Stockyards division of the US Department of Agriculture must restore competition to agricultural markets by enforcing antitrust regulation and restructuring large firms when necessary. 

In addition to fair markets, small and mid-sized meat plants could use support with expanding their reach and capacity. One way to do that is through legislation that offers financial assistance for obtaining state and federal inspection, which can be prohibitively expensive, effectively bringing more small-scale slaughter facilities online for farmers and ranchers. Furthermore, lawmakers should both reauthorize Livestock Mandatory Price Reporting to facilitate open and transparent price discovery in the sector as well as require large meat packers to buy more beef on the open market, a move that would help to curb the vertical concentration in the industry.

The pandemic has exposed deep weaknesses in the meat industry. These simple measures would go a long way towards addressing those weaknesses, which would, in turn, support independent ranchers like Kovach and ensure a safe and reliable food supply for American consumers.

Rob Larew is the president of the National Farmers Union.