Economics Research Institute Study Paper
Utah State University Department of Economics
Potential animal numbers range from nearly 170,000 head to almost 370,000 head. The construction costs for a 400-head per day slaughter plant would be nearly $10,000,000 in 1995 dollars. The largest two cost items are the building (and associated mechanical facilities) and equipment. Assuming one shift per day operating at 90% capacity, the total (fixed and variable) cost per pound of meat processed would be approximately $1.32 per pound. The revenue associated with such a plant is estimated to be $1.35 per pound, leaving a net return of $0.03 per pound of processed meat, which would return approximately $1,000,000 per year at this operating capacity. Profitability is sensitive to the cost of the animals live, the ability to keep the plant operating at 90% capacity or better, and the price of processed meat.
Snyder, Donald L. and Johnson, Van, "The Feasibility of Constructing and Operating a Cull Cow Slaughter Facility in Utah" (1995). Economic Research Institute Study Papers. Paper 66.