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Study Examines Impact of Small Meat Processors in Iowa

May 23, 2011
 
 

By Laura Miller, Iowa State University

Investing in Iowa’s small meat processing plants could have positive local impacts in rural communities, according to a new report by Iowa State University economist Dave Swenson.

Swenson analyzed the state’s meat processing facilities for the Marketing and Food Systems Initiative at the Leopold Center for Sustainable Agriculture. Swenson’s report, “Exploring Small-Scale Meat Processing Expansions in Iowa,” is available on the Leopold Center’s website.

Iowa is a prominent leader in the nation’s meat-packing industry, particularly in cattle and hogs. Yet the state’s farms have declined over the past two decades, and growing numbers of Iowans live and work in urban centers. Rural decline raises the question of whether small meat processing plants can continue to compete with larger processors.

Small plants in Iowa are generally more labor-intensive than large ones, with less return on the labor. Swenson’s study found that small plants require significantly more employees, providing 13.3 jobs for every million dollars of meat compared to the statewide average of 4.7 jobs. Employees in small facilities typically receive less pay, although there’s room to develop skilled trades through training programs.

Niche markets

With increasing demands for specialized meat, like grass-fed cattle and pasture-raised hogs, small processing plants have the opportunity to fill profitable niche markets. Consumers who buy from local plants fuel job creation and keep more money within the community, a concept called the “local multiplier effect.” Swenson’s study suggests that investments to improve the efficiency of small plants can make them more competitive, as well as give a boost to the local economies of nearby rural communities. 

 

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