Bureau of Business Research
Date of this Version
8-23-1999
Abstract
The meat industry is an economic powerhouse for rural America - accounting for roughly one of every 16 rural manufacturing jobs. Moreover, this rural powerhouse is adding jobs at a fast clip, with recent growth of 8.5 percent a year versus just 1.2 percent a year for all rural manufacturing industries. Finally, rural America has captured a commanding 52 percent of all meat industry jobs, far above the level of a decade ago.
While all these figures are welcome news to rural areas eager to expand employment, geographic shifts under way in the industry raise fresh doubts over which rural communities will land new meat plants. Once concentrated in midwestern urban centers like Chicago, the meat industry is now most often found in rural towns and hamlets - and often far from the Midwest. Poultry processing has moved to the Southeast. Beef packing plants have moved to the Great Plains. And pork packing plants have begun moving out of the Corn Belt to the Southeast and Great Plains, but where they go next is highly uncertain, with the future location of hog production itself very much in question (Drabenstott).
What geographic shifts lie ahead for the meat processing industry? And what do the shifts in this powerhouse industry mean for the future of the rural economy? This article reviews some critical trends in the meat industry by examining for the first time a special database on the industry - the Longitudinal Research Database (LRD) maintained by the Bureau of the Census. The first section shows that the meat industry has moved to new regions over the past three decades, has concentrated to a considerable degree within those regions, and has consolidated in bigger plants. The second section considers what the trends mean for rural America. The article concludes that the meat industry is likely to concentrate geographically even more in the future, promising a new source of economic growth for some rural communities while leaving many others behind. Yet even in areas where the industry does locate, a sharp drop in industry wages raises new questions about its local economic impact.
Comments
Published by the Federel Reserve Bank of Kansas City.