Food Processing

AG BM 102

Introduction
Adds value to farm production Creates products consumers want Employs lots of people ~ 90,000 in PA

An Overview
Products Location Competition Issues

Meat
Large Animal slaughter a few plants Processed meats lots of plants Poultry several big plants A lot of consolidation going on mergers across species Tyson bought IBP

Boxed Beef

Seltzers Lebanon Bologna

Chicken Plant

Dairy
Milk Cheese Ice cream Butter powder

Ritcheys Dairy Ice Cream

Land OLakes Butter/Powder Milk Plant

Farmstead Cheese

Fruits & Vegetables

Canned (Furmans) Dried Pickles, sauces etc. (Heinz) Frozen (Hanover)

Grain
Flour Cereal Pet Food Animal feed

Browns Flour Mill

Rollstands

Sifter

Flour Trailer on Scale

Bakery
Bread Cookies & crackers

Candy
Chocolate Other candy Gum PA largest candy producing state Hershey and many more firms

Fats and Oils

Animal Vegetable Very little in PA

Beverages
Beer Wine Soft Drinks About half the jobs beer and half soft drinks a little wine Produce near consumer

Other Food
Coffee Ice Fish Pasta Pretzels & snack foods (PA biggest in this) Other stuff Fastest growing category new products

Primary Reason for Plant Location in Pennsylvania

Farm 26% Consumer 34%

Both 6%

Other 34%

Traditional Issues
Efficiency Competitiveness Demand New products New Technology

Newer Issues
Farm inputs Labor Water Solid waste Waste water Food safety

How many Food Companies will we have?

Market growing slowly Lots of mergers a long-term trend Is Hershey too small to be independent? Heinz? Campbells? Food conglomerates common

Concluding Comments
Key provider of consumer satisfaction Big recipient of food dollars Important to PA Big employer of PSU grads Works closely with suppliers & customers to do their job better