Pork Processing

Revised September 2025.

Production Background

When it comes to pork processing, one of the inherent problems is that there is not a great deal of difference between the best yielding hog and a low yielding hog, especially when compared to beef. Live animals are differentiated by breed, of which there are about a dozen main breeds in the United States. Another aspect of differentiation is weight, which can range from 240 to 290 pounds on a live basis. Muscling, loin eye size, marbling in the loin eye and in the principal ham muscles are also important determinants of quality. However, it is the percentage of lean meat as compared to bone and fat that determines the final price when hogs are sold to major packers.

The cost of acquiring hogs typically comprises 70 percent of the cost of the slaughter-processing company. This cost runs higher for niche hogs such as organic. The kill and cut cost varies depending on plant size. Most packing plants have some sort of plan to pay the producer for edible items that he/she does not take. Normally these prices are at the low end of the commodity range for the items. All custom operations keep the "drop" or byproducts.

Another major challenge is that everybody wants to sell the loin, which represents just less than 20 percent of the carcass. There is really no romance in the hocks, spare ribs, back ribs or any shoulder meat that may be sold as fresh meat. Thus, with only about one-third of the pig being sold as fresh meat, the balance is further processed primarily into ham, bacon and sausage.

These products may include fresh pork sausage (or breakfast sausage) and fresh Italian sausage; emulsion products such as hot dogs and luncheon meat; coarse ground dinner sausage like kielbasa and bratwurst (fresh or cooked); and cured products such as bacon, ham and Canadian bacon. These processed products really "gain value" after a brand and logo are created and the brand in the marketplace has some brand recognition and then brand loyalty. It is difficult to reach the levels of Hormel and Oscar Mayer who have brand equity. It not only takes good products to have at least brand loyalty, but it takes time and money - lots of it. Promotional budgets are needed for all forms of advertising, point-of-purchase materials, sales incentives and so on. 

Most small pork processing operations hardly devote any monies toward sales and marketing. Certainly not enough to warrant any difference, because there are virtually no budget allocations for marketing; the amount allocated for the general category have been used in direct sales efforts.

Developing a Niche

How does a smaller independent pork producer survive in what seems to be a harsh environment? The simple answer is to seek out a niche that the "big boys" cannot tread. That may be in a small developing export market in which customers are looking for specialized customer service. It may be a breed-specific pig like the Berkshire or Duroc, which has some inherent excellent marbling qualities. Another possibility may be to work with upscale, small specialty retailers where quality and service are paramount. 

Developing a "signature" cut or product that is unique in the marketplace is another way to create a market niche. One can even create a niche in the use of product packaging. For example, one could create a smaller package size for an entire line of products that would appeal to seniors.

These are just a few examples of how additional value can be created, leading to increased returns for the producer in spite of higher processing costs.

Estimated Daily U.S. Slaughter Capacity by Plant, Fall 2017

Source

Industry at a Glance, American Meat Institute, Washington, D.C.

Livestock Slaughter 2024 Summary, USDA

Estimated Daily U.S. Slaughter Capacity by Plant

Processing/Manufacturing

• American Association of Meat Processors (AAMP) - Representing more than 1,300 small- and medium-sized meat, poultry and food businesses.
• Beef & Pork Whole Animal Buying Guide, Iowa State University Extension - This consumer-oriented guide explains how to buy a whole or half portion of a pork and beef processed at a meat locker. It includes marketing terms and information on storage and handling, meat inspections, weight and common retail meat cuts.
• Food Safety, American Association of Meat Processors