1 / 25

HISTORICAL DEVELOPMENT OF THE U.S. LIVESTOCK MARKETING & MEAT PACKING INDUSTRIES

Explore the historical development of the U.S. livestock marketing and meat packing industries, including marketing methods, colonial America, inventions that changed the industry, and federal laws regulating meat.

lucasp
Download Presentation

HISTORICAL DEVELOPMENT OF THE U.S. LIVESTOCK MARKETING & MEAT PACKING INDUSTRIES

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. HISTORICAL DEVELOPMENT OF THE U.S. LIVESTOCK MARKETING & MEAT PACKING INDUSTRIES

  2. MARKETING METHODS • BARTER - Exchange of goods and/or services. • PRIVATE TREATY - Direct negotiation between buyer and seller. Still widely used today. • PUBLIC AUCTION - Auctioneer accepts competitive bids from buyers and conducts sale.

  3. MARKETING METHODS • TERMINAL MARKET - Commission firm represents seller and receives a commission for negotiating sale and selling terms. • DIRECT MARKETING - Sale may be negotiated by private treaty or by commission firm before livestock moves directly from farm to packing plant

  4. COLONIAL AMERICA • Early settlers bartered livestock and products for other necessities. • Since wild game was plentiful, early livestock was used for draft and milk. • Only after production ceased were they harvested for meat, hides, tallow and other byproducts.

  5. COLONIAL AMERICA • Livestock produced close to consumers and many sales were direct to butcher or retail market. • Most home slaughter was done in winter since refrigeration did not exist. • Excess meat was preserved by smoking, salting or pickling and“packing” in barrels. This is the origin of the term “meat packer”.

  6. COLONIAL AMERICA • As settlements expanded westward from the east coast, it became necessary to “drive or herd” the livestock back to the eastern population centers. • Many of our present east - west highways began as livestock trails. U.S. Route 40 is an example

  7. COLONIAL AMERICA • First commercial meat packing plant was established by William Pynchon in Springfield, MA in 1662. • As distance from farms to markets increased, livestock dealers became important as drovers who worked for a commission to market the livestock. It was a high risk profession to buy and deliver the livestock.

  8. MARKETING IN THE 1700s • In 1756, the market in Brighton MA, near Boston became the first public auction market. • Following the War of Independence, livestock production expanded westward into the fertile Ohio river valley. • Cincinnati, Ohio became known as “Porkopolis”. Meat and livestock moved down the Ohio & Mississippi rivers.

  9. MARKETING IN THE 1800s • New England became industrialized, the southern states specialized in cotton and the “Corn Belt” became the center for grain and livestock production. • Canals, roads and railroads were built to move meat and livestock back to the eastern cities. • By the mid 1800s, Chicago emerged as the dominant livestock assembling center.

  10. MARKETING IN THE 1800s • The first livestock commission firm began in Chicago in 1857. • In 1865, the Illinois legislature incorporated the Union Stockyards and Transit Company • Packing plants were soon built surrounding the Chicago Stockyards. • Soon, terminal markets were established in East St. Louis, Kansas City, Omaha, etc.

  11. MARKETING IN THE 1800s • Prior to the Civil War, cattle ranching in Texas expanded dramatically. • When the coastal markets were blockaded during the war, the cattle were trailed to the railroad towns of Abilene, Wichita and Dodge City, KS, to be shipped to Chicago. • The “cowboy” era and trail drives ended about 1880.

  12. INVENTIONS CHANGE THE LIVESTOCK INDUSTRY • Barbed wire was invented in 1873 - Native prairies and range land could be managed. • Windmill was adapted to range land - Cattle and sheep did not have to be near streams. • Refrigerated rail cars - Meat could be processed close to production units and shipped to large population centers.

  13. MARKETING IN THE 1900s • Mechanical refrigeration was well established by 1890 and meat packing became a year around business. • By 1903, five major meat packers emerged - Swift, Armour, Cudahy, Wilson & Morris. • The Packer & Stockyards Act of 1921 provided market regulation and oversight by USDA.

  14. MARKETING IN THE 1900s • Central terminal markets remained dominant until after World War I. • The USDA Federal Meat Grading Service was set up in 1926 to grade beef carcasses. • Establishment of a market news reporting service and an improved highway system enabling the use of trucks to transport meat brought change to the industry.

  15. MARKETING IN THE 1900s • By the end of World War II, the packing plants moved closer to the production areas, terminal markets declined and direct marketing increased. • In 1970, the Union Stockyards stopped accepting hogs and in 1971, trading in cattle and sheep also stopped.

  16. AUCTION MARKETS • Originally were used more for feeder livestock and cull breeding animals than for finished slaughter livestock. • Increased as the terminal markets declined and have remained fairly stable. • Future is uncertain except for breeding livestock and horses.

  17. FEDERAL LAWS REGULATING MEAT • 1906 - The Meat Inspection Act provided for inspection for wholesomeness, freedom from disease and adulteration. • 1958 - The Humane Slaughter Act. • 1967 - Wholesome Meat Act extended meat inspection to products in interstate trade. • 1990s - Hazard Analysis of Critical Control Points (HACCP).

  18. MEAT INDUSTRY TERMINOLOGY • Slaughter, process & harvest are synonyms. • Ante-mortem = Pre-harvest. • Dressing percentage = (Carcass Weight / Live Weight) x 100 • Sheep = 50% • Cattle = 60% • Swine = 72% • Poultry = 78% to 83%

  19. MEAT INDUSTRY TERMINOLOGY • Drop, offal, viscera or by-products are terms used to describe the parts removed from the carcass (head, hide, hair, shanks & internal organs). • “Kosher” refers to meat from animals slaughtered under procedures approved by Orthodox Jewish Law.

  20. LARGEST MEAT PACKERSBEEF 2000 • IBP - Iowa Beef Processors (div. Of Tyson) • $ 9.3 billion in beef sales • Excel - (division of Cargill Inc.) • $ 7.0 billion in beef sales • ConAgra Beef • $ 6.0 billion in beef sales • Farmland - $ 2.8 billion in beef sales • Smithfield - $ 2.3 billion in beef sales • These top 5 companies harvest 85% of the steers and heifers processed in the U.S. each year.

  21. LARGEST MEAT PACKERS PORK 2000 • Smithfield Foods processes 18.8% of U.S. pork processing. Largest hog slaughterer with daily capacity of 78,500 head. • IBP has 17.6% of U.S. pork processing. • ConAgra has 10.5% • Excel has 9.7% and Farmland has 8.0% • These top 5 companies harvest 65% of the U.S. pork production.

  22. LARGEST MEAT PACKERS POULTRY 1999 • Tyson Foods (AR)- $ 7.5 bil. in sales • Perdue Farms (MD) - $ 2.5 bil. in sales • Gold Kist (GA) - $ 1.6 bil. in sales • Pilgrim’s Pride (TX) - $ 1.3 bil. in sales • Foster Farms (CA) - $ 1.1 bil. in sales

  23. PER-CAPITA CONSUMPTION RETAIL WEIGHT 2000 • BEEF 64.4 lb. • VEAL 0.5 lb. • PORK 47.7 lb. • LAMB 0.8 lb. TOTAL RED MEAT 113.5 lb.

  24. PER-CAPITA CONSUMPTION RETAIL WEIGHT 2000 • CHICKEN 52.9 lb. • TURKEY 13.6 lb. TOTAL POULTRY 66.5 lb. TOTAL RED MEAT & POULTRY 180.0 lb.

  25. PER-CAPITA SPENDING 2001 BEEF, PORK & CHICKEN • BEEF $213.43 47.0% • PORK $135.26 28.5% • BROILER $116.39 24.5% TOTAL $ SPENT $ 475.08

More Related