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Current Agriculture, Food & Resource Issues

C. E. Ward


In 1976, there were 145 steer and heifer slaughtering plants in the United States with
annual slaughter of 50,000 head or more (Grain Inspection, Packers and Stockyards
Administration, 2000). These plants slaughtered 22.4 million cattle. Plants with annual
slaughter exceeding one-half million steers and heifers annually numbered 5 and accounted
for 14.8 percent of slaughter by all firms in the over-50,000 head per year category. Average
slaughter in these largest 5 plants averaged 666,800 head.

Comparable data for 1998 show major changes. The number of plants in the category of
50,000 head or more per year had declined to 38, but slaughter in these plants had increased
to 26.7 million head. Fourteen plants each slaughtered one million or more cattle in 1998.
These 14 accounted for 66.8 percent of total steer and heifer slaughter in the 50,000 head or
more size group. Average slaughter per plant in the largest plants nearly doubled from 1976.
Annual slaughter in the 14 largest plants averaged 1,274,400 head. The same trend is evident
also for boxed-beef processing plants.

Not only did plant size increase, growth and consolidation resulted in larger beefpacking
firms as well. There can be little argument that concentration in fed cattle slaughter and
boxed-beef production is high by economists’ standards. In 1976 for steer and heifer
slaughter, the four largest firms accounted for 25.1 percent of total steer and heifer slaughter
(a CR4 of 25.1) (Grain Inspection, Packers and Stockyards Administration, 2000). By 1998,
the four largest firms accounted for 80 percent of total steer and heifer slaughter. Their share
of boxed-beef production was even higher, 85.0 percent. It should be noted that the four
largest firms in 1976 were not the same as the four largest firms in 1998. Mergers and
acquisitions were largely responsible for the difference in leading firms. For example, a series
of mergers and acquisitions in 1987 alone, involving some of the largest meatpacking firms,
increased the CR4 in steer and heifer slaughter by 12 percentage points, from 55.1 to 67.1
(Grain Inspection, Packers and Stockyards Administration).

Porkpacking followed a trend similar to beefpacking but changes were not as dramatic. In
1976, there were 141 plants with annual slaughter of 50,000 or more hogs (Grain Inspection,
Packers and Stockyards Administration). These plants slaughtered 66.0 million hogs and 12
of the plants had an annual slaughter exceeding one million head. Those 12 plants accounted
for 28.5 percent of the total for plants with 50,000 or more hogs slaughtered per year.
Average slaughter per plant in the 12 largest plants was 1,569,000 hogs.

The number of plants slaughtering 50,000 or more hogs annually had declined to 68 by
1998 but annual slaughter had increased to 90.3 million hogs. The number of plants
slaughtering one million or more hogs annually increased to 30 and their share of total
slaughter in the 50,000 head or more size group increased to 91.4 percent. Average slaughter
for the 30 largest plants increased to 2,849,000 hogs.

As in the beef industry, growth and consolidation led to larger porkpacking firms also.
The four largest hog slaughtering firms in 1976 had a combined market share (CR4) of 32.2
percent. Note the CR4 for hog slaughter two decades ago exceeded that for steer and heifer



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