ALTERNATIVE MODELS FOR THE FUTURE OF PORK PRODUCTION

Structural changes now occurring in agriculture have led to a bifurcated pork channel. One side of the channel is characterized by "commodity" hogs produced by traditional independent producers, nonintegrated contractors, partially integrated contractors and independent producer networks. The other side is characterized by more industrialized producers with integrated genetics, production and slaughter. Both sides will tend toward greater consistency and higher yielding carcasses. However, the commodity side will concentrate more on providing packer values while the specialty or industrialized side will tend more towards final consumer values. The dual channel is not static. To date, many of the potential consumer market opportunities possible on the specialty side remain untapped. The future viability of the various types of producers has been an open question. There have been concerns about whether the traditional producer is viable. Some maintain that larger specialized operations enjoy a cost advantage over traditional producers while others dispute this contention. In the final analysis the investment patterns may provide the best prediction of which type of operation will own the industry in the future. At present, the majority of new investment on the commodity side has been made by the nonintegrated and partially integrated contractors. Virtually all the new investments on the specialty side have been made by the firms which have more fully integrated production and slaughter.


Issue Date:
1998
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/18272
Total Pages:
25
Series Statement:
Staff Paper 299




 Record created 2017-04-01, last modified 2017-08-24

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