LINCOLN, Nebraska: Overwhelmed by pandemic-related closures of large slaughterhouses and a recent cyberattack on meatpacking giant JBS, which upended meat supply chains and added to a growing glut of animals, U.S. cattle ranchers and investors have begun building smaller beef plants, in a bid to diversify production.
At least five new processing facilities have opened or are slated to be built across the U.S., in the wake of last year's pandemic disruptions, which hobbled production and led to nationwide meat shortages, Reuters reported.
With the addition of new plants and the expansion of existing ones, American's daily slaughter capacity is expected to rise by about 5 percent, it added.
Ample cattle supplies, rising beef prices and strong profit margins have made the market appealing for smaller startup meat plants, who feel adding more processing facilities would ensure production continues, even if large facilities close.
According to ranchers and the U.S. Agriculture Department, the American meat industry is currently too consolidated with only four companies - JBS USA, Tyson Foods, Cargill, and National Beef Packing Company - which are slaughtering 85 percent of the nation's cattle.
Thus, idling even a few large plants leads to ranchers unable to slaughter cattle, even as meat supplies tighten.
While the U.S. still needs larger meatpacking plants to produce large volumes of meat, "We absolutely need more capacity and more players", said rancher Rusty Kemp, who is planning to build a $300-million beef plant named Sustainable Beef in Nebraska this year, according to Reuters.
The plant will be co-owned by cattle producers, who will provide animals to the plant, instead of to major meatpackers, he added.
"The pandemic opened our eyes to the needs of local producers," said Todd Hertzog, who opened Hertzog Meat Company in Missouri this month to serve ranchers wanting to sell higher-quality beef.
As part of the $4-billion initiative to boost food security, the U.S. Agriculture Department has also pledged to support increased meat processing.
"The hope would be that by spreading out, by creating diversity in size and diversity of ownership and diversity of operations, we create greater resilience," said USDA secretary Tom Vilsack, as quoted by Reuters.