Beef Processing Competitive Landscape
Greater Omaha Packing, Caviness Beef Packers, and Kenosha Beef International source their beef by buying cattle from ranchers and livestock operators. The requested information about the companies as well as the current trends in the United States’ meat packing industry is presented below.
Greater Omaha Packing
- Greater Omaha Packing sources its beef from the surrounding livestock operators and ranchers. The company has been working with most of the ranchers for many years.
- Some of the ranchers include Olo Ranch, Sandhills Cattle Feeding Inc., Circle 5 Beef, Inc., Rolling Stone Feed yard, LLC, Schmidt Land and Cattle, RPJ Cattle, Anderson Farms, Samson, Inc., Bar Standing S Ranch, Feller Co., and Beller Feedlot.
- Greater Omaha harvests about 14,000-15,000 steers weekly yielding about 150,000 boxes of beef and other meat varieties. The meat is sold in all over the United States and exported to over 70 nations across the globe.
- Greater Omaha derives its competitive advantage from its strategic geographical location. The company is located at the center of the leading corn producing area in the United States. Thus, Greater Omaha enjoys a consistent source of beef all the year round to sustain its markets.
- The company’s central Midwest location is also strategic. It facilitates interstate access needed to serve west and east coasts conveniently. The good access has also nurtured reliability, timely delivery, and ensured operational cost efficiency.
- Another source of Greater Omaha's competitive advantage is the fact that it is a single source abattoir, fabricator, and exporter. Thus, it is able to control quality throughout the supply chain. The fact that the company is one of the few US packing plants certified to supply non-hormone treated beef to the European Union attests to this advantage.
- Greater Omaha Packing is a privately-owned firm.
- The $1.7 billion annual revenue plant is owned by Henry Davis. Davis’ grandfather founded the plant in 1920.
Caviness Beef Packers
- Caviness Beef Packers sources its beef from ranchers and dairy operators. The company also sources beef from feedyards.
- Caviness Beef mainly acquires cull cows and bulls through its cattle procurement department. The company processes 2600 heads of cattle daily in its three processing locations. The products are sold throughout the US and other parts of the world.
- Caviness Beef’s low cost source of beef is a key competitive advantage. The company mainly relies on cull cows and bulls from ranchers and dairy operators. Therefore, it works closely with the ranchers’ culling programs to source the beef.
- Ranchers and dairy operators only need to contact the company whenever they have culled cows and bulls to sell. The sustainable source ensures that the company has a higher bargaining power.
- Caviness Beef’s geographical location is also a source of competitive advantage. Texas is a vibrant cattle region, thus ensuring a consistent supply of beef throughout.
- Caviness Beef Packers is a privately-owned company. The company was founded in 1952 by Pete Caviness.
- Today, his son, Terry Caviness is the Chief executive officer (CEO). His sons, Trevor and Reagan and the president and vice president, respectively.
Kenosha Beef International
- Kenosha Beef International, which operates as Birchwood Foods, externally sources its beef by buying cattle from ranchers and dairy operators. The cattle are slaughtered, and the meat processed into the various beef products such as ground beef.
- Kenosha produces approximately 6 million pounds of pizza toppings, beef patties, and taco meat per week.
- Kenosha Beef International’s industry knowledge and expertise is a key source of competitive advantage. With over 80 years of experience producing beef and related products, the company possesses in-depth knowledge of the industry, especially in the ground beef sector.
- Kenosha Beef International is also known for its high-quality products. The company continually adopts emerging technology to improve its processes and ensure excellent food safety. Customers have always awarded the company the highest quality scores possible after the regular audits and inspections.
- Kenosha Beef International is a privately-owned company. The firm was founded in 1936 by Frank Vignieri.
- Today, his grandson, Dennis Vignieri is the president and CEO of Kenosha Beef International.
Current Trends in the United States' Meat Packing Industry
Consolidation of the Meat Packing Industry
- The meat packing industry has experienced continued consolidation with larger meat packing companies replacing the smaller ones. Apparently, only 50 plants account for approximately 98% of beef production in the US.
- Compared to other types of meat such as poultry, consolidation is predominant in the beef segment with only four companies controlling 85% of all the beef in the market.
- Consolidation is an important trend as it is changing the structure and dynamics of the industry. It has led to the replacement of smaller players by larger players who have economies of scale.
- However, the trend has adversely affected the resilience of the industry after major problems like the current COVID-19. If the major meat packing plants shut down, consumers will not access beef readily.
- According to Schmidt, an expert meat industry analyst, consolidation has adversely affected the meat packing industry and the larger food industry in the US by exposing it to the negative effects of major disasters like current COVID-19.
COVID-19 Threat in Meat Packing Plants
- As the COVID-19 pandemic continues to spread across the US, meat packing plants have become hot spots for the spread of the virus. Already, more than 100 meat packing plants in the country have reported outbreaks of the virus.
- Some meat packing plants in most states have suspended operations tempor arily despite President Trump given an order requiring them to remain operational. The working conditions characterized by pressure for efficient production and limited opportunity for advocating for safe conditions make the meat packing plants more prone to COVID-19.
- COVID-19 threat trend is important as it affects the safety of workers in the meat packing plants as well as their families and friends. The recent trend has had real implications on the industry affecting all meat products, including beef, poultry, pork, and game.
- COVID-19 threat has caused the demand and supply in the meat packing industry to decline. The limited supply of fresh beef from meat packing plants has in turn affected other businesses that depend on the beef such as restaurants.
- An industry analyst, Heather Jones, noted that while some meat products like steak may be in ample supply, others like ground beef will experience a shortage of supply because the processors and packers are struggling to keep up with demand.