The feasibility of operating a value-added hog processing facility

Abstract

Consolidation and integration in the hog industry has sparked interest in the feasibility of a grower-owned value added hog processing facility and marketing operation. As a result, Tim and Tom Meeks contacted the Center for Agribusiness and Economic Development to investigate the cost and returns to operating such a facility. The general idea is to secure market access and improve farm income and profitability through processing their own hogs and marketing the finished products directly to stores and restaurants. Marketing a high quality sausage and finished cuts on a consistent basis is believed achievable by using top end hogs. The Meeks are considering the purchase of an existing commercial processing facility near Waycross, Georgia. Given current hog prices and the wholesale to retail price spread, the Meeks family has decided to enter the value-added pork market, and try to capture a larger percentage of the retail pork dollar.