Beef Buzz News
Dr. Derrell Peel Explains Challenges With Expanding Meat Processing Capacity
Tue, 25 May 2021 08:19:26 CDT
Expanding meat processing capacity is one of those issues that falls under the heading of ďeasier said than done.Ē
Ron Hays Beef Buzzes With Derrell Peel
Dr. Derrell Peel, OSU Extension livestock market economist, said there are several major challenges with expanding processing capacity.
There is a lot of interest in these really small, local plants and honestly that is not going to change the overall numbers much, Peel said.
Some proposals for medium sized plants have been discussed but it will take at least two years to bring those plants online, he said.
There is really not much that can change in the short term, he noted.
Plants have been running at full capacity, even with Saturday runs but Saturdays have been typically reserved for plant maintenance and deferring maintenance will eventually lead to breakdowns and other disruptions, Peel said.
Large packer margins are proving short run incentive to plants to expand capacity, but Peel notes the limitations of physical space and labor shortage make expansion difficult.
Labor is the biggest limiting factor, he added.
During a recent special meeting in Phoenix among farm groups a set of proposals aimed at fixing the issue were announced, including renewing mandatory price reporting with more information on value added programs.
Mandatory price reporting is valuable to the industry, Peel said.
We love having the data, but I donít think we have found a lot of things that we didnít already know, he said.
Iím an economist so more information is always better, Peel said.
Click on the LISTEN BAR below to hear more of Ronís interview with Dr. Peel.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for todayís show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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