A Rabobank analysis suggests an expansion of 5,000-6,000 head daily to the beef packing capacity would help return U.S. cattle supplies and packing capacity to equilibrium without a sharp contraction in beef cow numbers.
“If such expansion can be achieved through in-plant technology improvement and new, consumer demand-driven small- and medium-sized plants, profitability will be more evenly distributed throughout the beef and cattle supply chain,” according to Dustin Aherin, analyst of animal protein for Rabobank.
Adding capacity, in the long run, would provide balanced profitability throughout the supply chain.
