Slaughter plants as food processing companies

As people involved in the business of pork production, we tend to think of our slaughter plants as the final destination for our production. In fact, the slaughter plants don’t view themselves as pork processors. Rather, they are increasing viewed by upper level management and investors as food processing companies. We are just the suppliers of the raw product for their processes.

The August, 2012 issue of Food Processing Magazine (www.foodprocessing.com) published a listing of the 100 largest food processing companies in the US based on 2011 food sales. PepsiCo topped the list with $38,396 million in food sales, out of a total sales volume of $66,504 million. Second on the list of food processors was Tyson Foods with $30,975 million in food sales out of $32,266 million in total sales.

Number 6 on the list was JBS USA with an estimated $14,000 million in food sales which represented all of their US sales. Smithfield Foods was number 9 with $11,093 million in food sales out of $13,094 million total sales.

Cargill Inc. was number 14 with an estimated $8,000 million in food sales out of $119,000 million total sales. It is interesting to note that Cargill’s total sales were 179% of the total sales of PepsiCo and food sales represented less than 10% of their total income. Hormel Foods Corp was number 15 with $7,895 million in food sales which represented their total income.

These 5 ‘foods ‘ companies are extremely important to the pork industry. According to the National Pork Board these 5 companies accounted for almost 72% of our daily slaughter capacity in 2011.

Each of these 5 companies has chosen a different path to their success as a food processor. Tyson slaughters and processes pork, beef and poultry, with major integration of their poultry business from birds to consumer end products. They have a small ownership in a contract pork production segment of their total slaughter needs.

JBS slaughters pork and beef, with ownership interests in feedlots representing feeder cattle to consumer end products. Based in Brazil, the US division is only a part of their overall production portfolio.

Smithfield is primarily an integrated pork producer owning pigs and facilities from birth to consumer end products. They also have production and processing in a number of foreign countries. Hormel slaughters pork and poultry with ownership of both pigs and poultry and is primarily US based.

Cargill slaughters pork and beef, with ownership of production facilities for both pork and beef. In addition, they own grain processing, fertilizer plants, risk management firms, and are involved in a host of other agricultural enterprises around the world.

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