The feasibility of operating a value-added hog processing facility

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Date
2002-07Author
Ferland, Christopher
Wolfe, Kent L.
McKissick, John C.
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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.