2020 Outlook – Continued Growth & Challenges for Processors

Statement by Chris Young, Head of AAMP, Posted on January 9, 2020

Chris-Young-2015-1-300x300.jpgAs I look at the year ahead and what it means for the independent processor, the outlook continues to be promising. AAMP members, as well as others in the industry, report sustained business growth and more opportunities on the horizon. There are certainly challenges to maintaining this growth and being able to provide customers with the continued quality products they expect, but I trust small processors are up to the task. Below are some of the specific items I see in the industry for the coming year.

Business Opportunities

Business has been flowing back to the small processor for the last five years or more and I don’t see that changing. Some processors have experienced ups and downs, but for the most part, everyone has all the business they can handle and more at the moment. One area that continues to see growth among independent processors is co-packing products for other companies. Many AAMP members have seen this area of their business continue to grow. The business comes mainly from small start-up companies looking for a way to grow their business without expanding their facility. Larger companies are also using co-packing to offer a new product line; they find they can often get to market faster by using a company that is already equipped to make the product. The independent processor is known for the quality of products he or she makes, and this is what keeps the customers and businesses coming back.

Regulatory Front

Regulatory issues will continue to be a focus for AAMP moving forward as several possible changes are coming that could greatly impact processors and how they make their products. The first issue is FSIS’s latest version of Appendix A & B. This work has been a few years in progress now. The industry and FSIS have worked together to attempt to create a document that addresses food safety issues but is also practical for processors to use. Our industry working groups continue to do research relevant to these documents and not all of that effort will be completed before FSIS releases the new document; however, I believe that the scientific results will warrant modifications and that there will be beneficial changes to the documents in the future.

We are also looking for a change in the humane handling regulations that will allow for more common sense to be used when dealing with incidents, such as mis-stuns on the kill floor. We are at a crisis point for small farmers and processors as we do not have enough capacity to slaughter the number of animals being produced under inspection. Many medium and small processors have closed their slaughter floors after growing tired of the enforcement of the regulation.

Industry Staffing

Probably the biggest challenge facing processors in 2020 is the lack of not only qualified workers, but workers in general. Hiring and retaining employees in our industry has always been an issue, but it is even more challenging now. As we maintain a decent economy, there are a lot more jobs for people to choose from. It can be a challenge to find a way to entice people to come and work in a processing plant. This topic has been the focus of many conversations I have had with processors all over the country. How much do you pay? What kind of benefits do you give? What are today’s employees looking for? Processors will need to get creative in what they do to hire and retain employees and I am confident that they will; their business depends on it.