Beef Supply Chain Wrestles With The Cost Of Resiliency

Feb 02, 2022

Fundamental changes are transforming the beef supply chain from a just-in-time delivery model toward a just-in-case approach. Managing the costs associated with these changes may result in a shift of the historical live cattle and retail beef price ratio, according to a new RaboResearch report, “Beef Supply in a Post-Covid World.”

“While a cattle producer has little or no control over what happens in the beef supply chain post-harvest, it will be important for livestock producers to be aware of changes occurring throughout the supply chain,” writes report author, Don Close, senior animal protein analyst with Rabo AgriFinance. “Any changes, any inventory building, any additional controls and inspections could have a direct impact on the total cost of beef to the end user, which could change historical norms for live-to-wholesale and live-to-retail price spreads.”

Meat processors, distributors and retailers are striving to build supply resiliency into the beef supply chain and reduce the risk of another round of empty grocery store shelves in the future. The major drivers of change explored in the report are:

Automation in packing plants to increase the efficiency of their labor force
Packaging that extends shelf life, is more durable for grocery delivery and meets sustainability expectations
Government and investor-led sustainability demands, which may require more documentation and verification methods throughout the supply chain
The transportation system’s technology and infrastructure overhaul that reduces carbon emissions and the risk for backlogs

The area of change with the greatest potential direct impact on cattle producers is meatpacking plants’ embedding more automation into their facilities. The report notes that the initial introduction of advanced technology will not serve as a replacement for labor. It will serve to make labor more efficient. However, the transformation toward greater automation will require a workforce with different skill sets or extensive retraining.

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Video: What Does 20 MILLION Hogs a Year Look Like?

?? The Multi-Plant System Processing 20 Million Hogs Annually in the Midwest JBS USA operates multiple large-scale pork processing facilities across the Midwest, including major plants in Iowa, Minnesota, and Indiana. Combined, these facilities have the capacity to process approximately 20 million hogs annually.

Each plant operates high-speed automated slaughter systems capable of processing up to 20,000 head per day, followed by fabrication lines that break carcasses into primals, sub-primals, and case-ready retail products.

Hog procurement is coordinated through electronic marketing platforms that connect regional contract finishing operations and independent producers to plant demand schedules. This digital procurement system allows for steady supply flow and scheduling efficiency across multiple facilities.

Processing plants incorporate comprehensive food safety systems, including pathogen intervention technologies, rapid chilling processes, and integrated cold-chain management. USDA inspection is embedded throughout the harvest and fabrication stages to ensure regulatory compliance and product integrity. Finished pork products — from bulk primals to retail-ready packaged cuts — are distributed through coordinated logistics networks serving domestic and export markets.