Meatpacking plant capacity and utilization: Implications for competition and pricing

A conceptual framework for examining implications of excess slaughtering capacity in meatpacking is presented. Excess capacity stems from two sources: percentage plant utilization based on line speed and based on length of operating time per given period. Data from a mail survey of 310 meatpacking firms verified that significant size differences exist among slaughtering plants. Significant differences in percentage utilization were also found for some species. Results suggest larger fed cattle slaughtering firms could be paying higher prices for cattle purchased.