Chapter 25 - Processing View Tape Conception to Consumer Part 2 The meat processing industry • Characteristics – competition for both • purchase of animals • sale of products • • • • Perishable product - processed rapidly Rapid turnover of product and $$ Sale of many by-products Essential as it puts food into a usable form Meat Industry Trends • Slaughter plants fewer but larger – 5200 in 1986 down to ~2600 – Processing plants (incl small ones) 6500 – 3 largest had sales > $34 B – Only Federally inspected plants sell interstate • 130 M head, 7.5 B birds inspected & processed/yr 2002 FARM BILL PROPOSAL • Limits ownership by packers to 2 weeks before slaughter • Very controversial • Amendment to US Farm Bill, would have large impact if passed on processors, meat industry • UPDATE - legislation to ensure open markets. (still pro’s and con’s) Leading Companies (1999) Vol of Sales in Meat & Poultry • • • • • • Conagra IBP Cargill Tyson Sara Lee Smithfield Omaha S.D. Minn. MN AR Chicago VA $12,916 $12,848 $ 9,000 $ 7,400 $ 4,300 $ 3,867 Leading Packers, 2002 • • • • ConAgra Cargill (Excel) Farmland Industries Tyson Foods • Smithfield is largest Pork producer/processor 2004 update • Smithfield bought farmland, Tyson bought IBP • Top US pork packers Company Smithfield Tyson/IBP Swift (ConAgra) Cargill/Excel Hormel Market share 0.26 0.17 0.11 0.08 0.08 http://www.oligopolywatch.com/2003/12/28.html http://www.ilfb.org/viewdocument.asp?did=3756 • Over 78% of beef consumed in the United States in 2002 was slaughtered and packed by five companies, and over 60% originated from three companies. Top US Beef Packers Thursday, Sept 05, 2002 http://www.ilfb.org/viewdocument.asp?did=3757 Top US Grocery Retailers Ranked by Sales Tuesday, September 03, 2002 • • • • • #1 Kroger Co., Cincinnatti, OH #2 Albertson’s Inc., Boise, ID #3 Safeway Inc., Pleasanton, CA #4 Ahold USA Inc., Netherlands #5 Wall-Mart, Bentonville, AR http://www.ilfb.org/viewdocument.asp?did=3697 U.S. supermarket industry Retailer Wal-Mart Kroger Albertsons Safeway Stores 2,875 2,488 2,287 1,481 2002 results (Billions) $54.00 $51.80 $35.60 $32.40 May 27, 2003, edition of the Wall Street Journal from: http://www.oligopolywatch.com/2003/06/09.html • Kroger – Kroger, Ralphs, King Soopers, City Market, Dillons, Smith’s, Fry’s, QFC, Owen’s, JayC, Gerbes, Hilander, PayLess,Baker’s, Kessel, Fred Meyer • Albertson’s – Albertsons, Jewel Osco, Sav-on, Acme Markets • Safeway Inc. – Safeway, Carrs, Dominick’s, Genuardi’s, Pavilions, TomThumb, Vons, Randalls, Park ‘n Save Foods • Ahold USA Inc. – BI-LO, Stop and Shop, Giant, Tops Markets, Brunos • Wal-Mart Supercenters Here are the transactions within the Big Five that have taken place over the past few years: • Tyson Foods acquired IBP in 2002 • Excel/Cargill entered into a joint venture in 2001 with Hormel to sell case-ready beef; acquired Compack's meat business in 2001 • Swift was (partially) spun off from ConAgra in 2002 • Farmland Industries filed for Chapter 11 in 2002; in 2003, its; beef operations were sold to US Premium Beef and its pork operation was sold to Smithfield • Smithfield has acquired Packerland Holdings (formerly #5) and Moyer Packing in 2002. • All slaughtering procedures must be conducted in humane manner. – Rendered insensible via bolt gun, stunning, or CO2 – Kosher methods require severing jugular instead Inspection • Inspection is MANDATORY Figure 25-4 The federal meat inspection stamps or marks applied to wholesale cuts or carcasses, packages of processed poultry parts, or packages of processed meat items such as chili or wieners. The number refers to the plant where the stamp was applied. (USDA) Cunningham & Acker Animal Science and Industry, Sixth Edition Copyright ©2001 by Prentice-Hall, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Grading • Grading is OPTIONAL • USDA provides service to those who request and pay for it. Figure 25-5 USDA inspector (right) and plant production supervisor check federally inspected beef carcass. Note also the grade stamps along the back and shoulder. (Oscar Mayer and Company) Cunningham & Acker Animal Science and Industry, Sixth Edition Copyright ©2001 by Prentice-Hall, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Figure 25-6 The federal meat quality grading stamp for beef or lamb, top left; beef yield grade stamp, top right. For poultry, both inspection and grade marks, bottom left and bottom right, may appear on a package or on a wing tag. (USDA) Cunningham & Acker Animal Science and Industry, Sixth Edition Copyright ©2001 by Prentice-Hall, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Additional Food Safety • Meat inspection (mandatory) • 1996 added testing for pathogens & new procedures to reduce contamination • FSIS – procedures, plants – salmonella testing, E. coli testing • HACCP – Hazard Analysis and Critical Control Points – Costs $100 M/yr ($.001/lb), saves $1-4B Cooling • Cool rapidly and thoroughly – Poultry in ice-water or air – Beef, pork, lamb, 27 F (~24 hr) – Beef require more time (30 hr +) • some get ‘aged’ Other Regulations • Additives control (FDA) – GRAS list – Prior sanctioned substances • Labels • Safe handling instructions Aging & Tenderizing, Curing & Smoking