| Show THE CHANGED MEAT PACKING INDUSTRY In years past the nations nation's meat pack pack- Ing packIng Industry was comprised of Important Independent companies which slaughtered processed and supplied fresh red meat and specialized meat products Also the Industry was recognized as one of the major clearly defined sectors of the American economy Over the years however one by one of the highly regarded meat packers either were acquired by other companies or disposed of their meat packing operations STILL A VITAl BUSINESS rhe The faded Identity of this Industry In terms of large companies wholly or mainly engaged in supplying fresh red meat and processed meat products in the aftermath of the merger of the major operators Into firms whose principal in- in interests Interests lie In other activities although some are food or related agriculturally enterprises Yet meat packing Is still of course Important to the American economy and to consumers Despite the significant reduction in inper per per capita capita consumption of red meat In recent years fresh and processed beef and pork products still bulk large In the diet of Americans However increased health con con- consciousness consciousness has led in higher consumption of fresh vegetables and fruits while tight budgets have caused periodic shifts In consumption patterns from red meats to poultry products FEAST TO FEAST FAMINE AMINE SITUA SITUATION TION Historically meat packing has been a feast famine business racking up lush profits at times and sinking into operating deficits In cycles of varying lengths Over the past twenty five years or so companies in the field have become objects to take over efforts due to attractive book values and the high profit potential during good years Often the acquisitions were facilitated by exceedingly rigid operating structures structures tures which made It possible for many meat packers to cope with Il Inflating lating costs and newcomers with modern plants located close to livestock centers The old line farms also were burdened by huge liabilities for pension plans LTV acquired Wilson buts but ly spun off what Is now Wilson Foods Armour was taken over by Greyhound Cudahy went to General Host John Mar Mor rell Is now a subsidiary of United Brands privately held Cargill took over Missouri Beef and Iowa Beef Pro was merged Into Occidental Petroleum Esmark spun off Its meat packing operation Into Swift Independent and sold 65 of the latter's stock to the public Esmark retained the processed meat business CURRENT INDUSTRY PROSPECTS Ample supplies of feed grains at low prices have traditionally sparked cyclical ups buildups of cattle and hog herds In recent years however other forces have Intervened and hence only nominal Increases have occurred In herds of cattle and hogs But the decided Improvement In monetary conditions Oe ie lower borrow borrow- borrowIng borrowing Ing costs and better availability of credit should enable farmers who raise cattle and hogs to take advantage of what should be regarded as a utopian climate with respect to feed grains sup sup- supplies plies and prices So supplies and prices of red meats meats- and poultry as well are expected to re- re remain re main favorable Insofar as customers are concerned In 1983 INVESTMENT IMPLICATIONS top meat packing firms now wholly wholly ly or partially owned by companies whose primary source of revenues and earnings are In other lines Investors fac- fac factors factors tors into their thinking the diversified or conglomerate nature of the enterprises that are the main participants In the meat packing and processing field The Research Staff of Bab Babson's ons on's Reports now has a hold position on the common of Esmark which has a 35 In in- in terest In Swift Independent Greyhound Occidental Petroleum and United Brands For the use of new Investment funds buy opportunities are deemed better In other stock groups |
