A group of cattle raisers intend to build a new plant in Nebraska to provide more competition in beef processing.
The group of seven families has announced plans to form a processing company called Sustainable Beef and to build a plant on 80 acres in North Platte, Neb., with construction to start in the spring. It’s a reaction to what many cattlemen perceive as an unfair pricing situation. Since the onset of the pandemic, cattle prices have risen about 5% but wholesale beef prices have gone up 26%. The major beef processors have come under harsh criticism, including from President Biden, because of concentration in the meat processing sector, where four companies process 85% of American cattle.
Sustainable Beef faces long odds, however. Cattlemen have tried establishing their own beef processing operations before, with limited success. New operations can’t bring to bear the economies of scale that the big four can.
Spokespersons for the big four processors told the Wall Street Journal that the pricing situation is in part because they have problems processing all the cattle available. Many plants were and are short-staffed, especially during peak COVID outbreaks, and the U.S. herd expanded between 2014 and 2019, leaving them with more cattle than they can handle.