that you are not doing a good enough job on collections. divided by the Receivables Turnover. Excludes “Meat, Poultry, and Fish Cutters and Trimmers” (51-3022) who perform routine meat cutting. marketing effort. Based on the Receivables Turnover, this estimates the collection period in days. These temporary inefficiencies have challenged existing plants to absorb the record number of slaughter-ready animals this fall and are likely contributing to the recent price weakness. This 10% should be balanced. The most straightforward solution to the labor challenge is to raise wages to a level that attracts the necessary workforce; however, efforts to retain workers via 10 percent to 20 percent wage increases have been, at best, minimally effective. But when we look at the large number of businesses in other labor-intensive industries that have moved offshore, it stands to reason that U.S. meat and poultry processing would consider the option. In the face of an already tight labor market, U.S. meat and poultry processors are building new plants and adding thousands of new jobs. Calculated as 365 Butchers and Other Meat, Poultry, and Fish Processing Workers: 38%: Meat, Poultry, and Fish Cutters and Trimmers: 22%: Slaughterers and Meat Packers: 14%: Miscellaneous Food Processing Workers: 6%: Other Production Occupations: 16%: Miscellaneous Production Workers: 7%: Transportation and Material Moving Occupations: 16%: Material Moving Workers: 14% Work may include specialized slaughtering tasks, cutting standard or premium cuts of meat for marketing, making sausage, or wrapping meats. Unfortunately this shortfall in labor comes at a very difficult time in the protein cycle. Investors, banks, and business executives use growth rates and industry trends to understand the market outlook and opportunity. Staffing challenges have delayed adding shifts or moving slaughter rates to full capacity. The level of industry commitment to automation varies, and many plants have already invested in the low-hanging fruit: packaging and distribution. Copyright ©2020. Better employment opportunities in many immigrant laborers’ home countries along with a policy-driven shift toward a more highly educated immigrant pool are also tightening the available labor supply. Visit our updated, State of the Meat & Poultry Industry Workforce 2019. The ability of meat and poultry processors to automate can vary widely by species. Injury and illness rates can be affected by many factors, such as the amount and quality of training, employee turnover rates, increased mechanization, and the speed of the production line. Return on Assets (ROA) is net income relative to total assets. Workers facing enforcement action are avoiding employment in heavily monitored meat and poultry processing facilities, preferring to work in less regulated “cash-pay” businesses. The poultry industry as a whole has a turnover rate approaching 100 percent, meaning that the average worker in the typical plant lasts six months at that plant. I want to hear from you. Reinvesting in order to attract and retain workers in the animal protein industry is long overdue. The financial strain on suboptimal plant utilization — whether from a geographic, product mix, or labor availability standpoint — will, in our view, force structural change. In this highly competitive environment, traditional strategies such as raising wages have been minimally effective, forcing companies to look for creative approaches to recruit and retain workers. Virtually all plants continuously post help-wanted signs. ... in Georgia alleging sexual discrimination for restricted bathroom access for two female poultry plant workers. Check out the October 2020 edition of Independent Processor: White Oak Pastures, chronic wasting disease facts that hunters and processors need to know, Indian cuisine, online steak shopping and much more! Generally, higher is better, since it indicates the business has less The ideal rate for poor performers should be maximized. But the math gets remarkably easy as the cost of automation falls and the cost of labor skyrockets. In the next two years, larger protein supplies are expected to pressure margins, restricting the protein industries’ financial ability to offset higher costs. NP. Instant Download - Available immediately upon purchase, Pension, profit sharing plans, stock, annuity, EBIT (Earnings Before Interest and Taxes), Office and Administrative Support Occupations, Installation, Maintenance, and Repair Occupations, Butchers and Other Meat, Poultry, and Fish Processing Workers, Meat, Poultry, and Fish Cutters and Trimmers, Transportation and Material Moving Occupations, Laborers and Freight, Stock, and Material Movers, Hand. Whether the solution is higher wages, automation, and/or an entirely new business model, we believe that companies unwilling to adjust are likely to find themselves at a structural disadvantage. By visiting this website, certain cookies have already been set, which you may delete and block. Labor costs account for an estimated 60 percent to 70 percent of average plant operating expense, and employers are reluctant to make any sizable adjustments. If this number is low in your business when compared to the industry average in the research report, it may mean your payment terms are too lenient or Other plants have foregone labor-intensive but value-enhancing, high-margined steps such as deboning, simply because of a lack of staffing. A low turnover rate may point to overstocking, obsolescence, or deficiencies in the product line or Check out the November 2020 edition of The National Provisioner: 2020 Consumer Trends Report, fight for food safety, microbials on dry-aged beef, alternative proteins and much more! Industry statistics cover all companies in the United States, both public and private, ranging in size from small businesses to market leaders. To integrators, these workers appeared to provide a more stable, reliable work force, and turnover rates dropped. Which is why you should focus to keep your average turnover rate around 10%. money tied up in fixed assets for each dollar of sales revenue. The poultry processing has an annual turnover rate of 100%.8 Poultry workers labor at both a high intensity and speed: A team of 7-10 chicken catchers will catch 30,000-60,000 chickens in one shift, and poultry processing workers may process up to 140 birds per Christine McCracken is a senior analyst with Rabobank's RaboResearch team. State of the Meat and Poultry Industry 2018: Will the stars stay aligned? By visiting this website, certain cookies have already been set, which you may delete and block. Visit our updated, This website requires certain cookies to work and uses other cookies to help you have the best experience. Companies must step up their focus on operational improvements that can improve yields and reduce labor needs. Market forecasts show the long term industry outlook and future growth trends. The ability of meat and poultry processors to automate can vary widely by species. 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