The National Provisioner Top 100: Processors cautiously optimistic
The companies in the Top 100 acknowledge challenges facing the industry, but the overall mood for the coming year is positive.
May 8, 2013
After fighting through the clouds that have dimmed the meat- and poultry-processing industry in the last couple of years (not to mention the rest of the U.S. economy), we may have found the silver lining. The majority of respondents to this year’s survey reported that their previous fiscal year was positive and that next year should be as good if not better.
Out of 31 executives who answered the question, “How was your company’s last fiscal year performance?” eight responded that it was their best year ever. An additional 13 noted that it was a good year, with the rest reporting either average or poor results. Almost half of the replies noted that the next year should be even better, while another 11 said it would be the same.
The companies in this year’s Top 100 list certainly took a “business as usual” approach, opening new facilities, introducing new products and investing in new technology. West Liberty Foods, for instance, became a landfill-free company. The company became one of the first in the country to have this claim verified by a third-party organization. Greater Omaha Packing Co. added 100,000 square feet of processing space in 2012. Several companies, including Jensen Meat Co., reported sales records in 2012.
As one processor noted, the mere act of returning to profitability after a terrible previous year was an accomplishment in itself — and a noteworthy one at that. For more company highlights, please visit www.provisioneronline.com.
When asked about their greatest concerns for the coming year, many companies pointed to external forces that could drain profitability from the meat industry. Government activism and overreach was a concern that many companies listed.
“Over-regulation and influences from agencies outside the food-processing industry that will add even more costs to the ever-increasing costs of the commodities used in our industry,” wrote one executive.
“Unneeded added government regulations,” wrote another, echoing the thoughts of many other respondents. Others were even more specific. Increasing medical costs or “Obamacare” was mentioned specifically by five companies as a future concern.
Naturally, last year’s drought and the resulting record increase in feed prices remained a chief concern. Many processors expressed their concerns on grain costs and the impact that a second consecutive drought could have.
In spite of the challenges, processors see many opportunities for growth in the coming year. Several companies see growth in value-added products, while export markets and lean beef items were also listed as growth opportunities.
“Good weather, good harvest, declining input costs,” wrote one executive, while another noted that with an upcoming expansion, “We will be able to accept the customers what want to give us business.”
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e-mail Sam Gazdziak at email@example.com.