There was a severe packing capacity constraint during the fourth quarter of 2016, and although some challenges and setbacks have been encountered through 2017, new pork processing plants in the U.S. have helped this from occurring again during the fourth quarter of 2017, according to Steve Meyer, vice president of pork analysis at EMI Analytics.
A small plant in Pleasant Hope, Mo., opened in September 2016 but has had some operational difficulties with the cooler system, Meyer said in providing an update on the various new pork plants. “We understand they are about to get that worked out. They have a 2,500-head-per-day capacity, but they have been running only around 1,000 head per day most of the year,” he added.
According to Meyer, a newly remodeled pork plant called Prime Pork opened in April 2017 in Wyndham, Minn., with “a capacity of about 5,100 head per day. They have gotten to that capacity and have been very active in the market since their opening.”
Sept. 5, 2017, saw the largest increase in slaughter capacity probably in the history of the business, Meyer stated. However, two newly opened, state-of-the-art facilities in Sioux City, Iowa, and Coldwater, Mich., helped absorb the increased slaughter numbers. The Seaboard Triumph Foods plant in Sioux City has a full one-shift capacity of 10,200 head per day, and the Clemens Food Group plant in Coldwater has a full one-shift capacity of 12,000 head per day.
“Both of those have been ramping up,” he said. “The Coldwater plant has had very few problems. They were at about 7,300 head per day last week. The Triumph Seaboard plant has had some difficulties.”
Meyer said the Seaboard Triumph Foods plant reached about 6,000 head per day in the last five to six weeks but has had equipment challenges. However, he said the plant is getting those problems solved and is headed for 12,000 head per day. The facility had expected to be up to full one-shift in capacity at the end of the November, but Meyer said it will likely reach that number more in line with the Coldwater plant's expectations of reaching full one-shift capacity in February 2018.
Meyer also pointed out that an additional new plant is expected to be completed in November 2019 in Iowa by Prestage Foods. Meyer said the company recently reported that the roof is almost completed.
“Another increase in capacity is coming,” Meyer said, adding that it remains to be seen how this will affect margins and what it will do to cutout value and producer prices as competition for hogs increases.