Capacity Constraints in U.S. Beef Supply Chain
Wednesday May 12th, 2021
Black swan events gathered much blame for poor prices and margins, yet, even without the pandemic and a packing plant fire, packers held market leverage as processing capacity was often stretched to its limits.
Adding packing capacity would result in both a larger U.S. beef industry and more balanced profitability throughout the supply chain, RaboBank’s food and agriculture division said last fall.
“If such expansion can be achieved through in-plant technology improvement and new, consumer demand-driven small and medium-sized plants, profitability will be more evenly distributed throughout the beef and cattle supply chain,” according to Dustin Aherin, RaboBank analyst.