RaboResearch predicts processing bottleneck will hit pork and poultry producers the hardest
September 4, 2018 – Low unemployment rates, new facilities and a shrinking labour pool are several factors creating struggles for some meat processing facilities, according to a release from RaboFinance, a financial services provider for agricultural producers and agribusinesses in the U.S.
A RaboResearch report, “Animal Proteins Labor Pains: Industry Bottleneck or Game-changer?” explores the employment challenges for the meat processing industry and examines possible solutions. The report says long-term solutions could include: integrating more automation, re-locating processing facilities to areas with greater labour pools, and making employee and workplace benefits more appealing.
However, with peak demand for workers approaching this fall, many companies will be struggling to retain and recruit workers.
“As packers compete for the same workers, we have seen turnover increase by as much as 50 per cent in the past year,” says RaboResearch animal protein analyst Christine McCracken. “We expect the pork industry to suffer first, but the broiler industry will soon follow. With as many as nine new plants and plant expansions underway that will require even more workers in the upcoming 18-24 months, we anticipate turnover and recruitment challenges that will stress the broiler market.”
In contrast, U.S. livestock farmers, anticipating continued growth due to consumer and export demand, have increased production by eight per cent in the past two years.
“The long-term need to supply the meat products that consumers want is at the centre of this challenging labour situation,” McCracken says. “There will be winners and losers in companies’ abilities to recruit and retain workers, automate, and adapt supply chains. In the short-term, the entire supply chain – including pork and poultry producers – will feel the pinch economically.”