Item 2. PROPERTIES

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Item 2. PROPERTIES

We have production and distribution operations in the following states: Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, Oklahoma, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, and Wisconsin. We also have sales offices throughout the United States. Additionally, we have sales offices, facilities or participate in joint venture operations in Argentina, Brazil, Canada, China, Colombia, the Dominican Republic, Hong Kong, India, Japan, Mexico, the Netherlands, New Zealand, the Philippines, South Korea, Spain, Taiwan, Turkey, the United Arab Emirates, the United Kingdom and Venezuela.



	Number of Facilities at September 29, 2018
	Owned	Leased	Total
Beef Segment Production Facilities	12	—	12
Pork Segment Production Facilities	9	—	9
Chicken Segment:
Processing plants(1) (2)	48	2	50
Rendering plants(3)	13	—	13
Blending mills(3)	7	5	12
Feed mills	33	—	33
Grain elevators(2) (4)	5	1	6
Broiler hatcheries	56	2	58
Breeder houses	494	44	538
Broiler farm houses(2)	52	—	52
Pet treats plant	1	—	1
Prepared Foods Segment:
Processing plants(1) (5)	34	3	37
Turkey operation facilities	6	—	6
Distribution Centers (6)	14	3	17
Cold Storage Facilities	51	1	52
Research and Development Facilities	1	1	2
		Capacity(7) per week at September 29, 2018	Fiscal 2018 Average Capacity Utilization(7)
Beef Production Facilities		156,000 head	85	%
Pork Production Facilities		458,000 head	89	%
Chicken Production Facilities		42 million head	89	%
Prepared Foods Processing Facilities		77 million pounds	86	%


(1)	Certain facilities produce products that are reported in both the Chicken and Prepared Foods segments. For presentation purposes, facilities are reflected in the segment that had the majority of the facility’s production. The Prepared Foods segment includes two owned facilities acquired in the Original Philly acquisition.


(2)	The Tecumseh Poultry, LLC. acquisition included two owned processing plants, a leased grain elevator and two broiler farm houses.


(3)	The American Proteins, Inc. acquisition included four rendering plants and five owned and five leased blending mills.


(4)	Includes five grain elevators purchased in fiscal 2018.


(5)	Excludes five owned and a leased facility related to divestitures during fiscal 2018.


(6)	Includes two owned Distribution Centers and a leased Distribution Center acquired in the American Proteins, Inc. acquisition.


(7)	Capacity per week based on the following: Beef and Pork (six day week) and Chicken and Prepared Foods (five day week). Capacity per week at year end is also impacted by the sale of non-protein businesses, net of acquisitions, during fiscal 2018. Average capacity utilization is based on capacity available throughout the year.

Beef: Beef plants include various phases of harvesting live cattle and fabricating beef products. We also have various plants which have rendering operations along with tanneries and hide treatment operations. The Beef segment includes three case-ready operations that share facilities with the Pork segment. One of the beef facilities contains a tallow refinery.

Pork: Pork plants include various phases of harvesting live hogs and fabricating pork products and allied products. The Pork segment includes three case-ready operations that share facilities with the Beef segment.

Chicken: Chicken processing plants include various phases of harvesting, dressing, cutting, packaging, deboning and further-processing. We also have 29 animal nutrition operations, nine of which are associated with the Chicken rendering plants, 19 within various Chicken processing facilities and one pet treats plant. The blending mills, feed mills, grain elevators and broiler hatcheries have sufficient capacity to meet the needs of the chicken growout operations.

Prepared Foods: Prepared Foods plants process fresh and frozen chicken, turkey, beef, pork and other raw materials into ready-to-eat sandwiches, sandwich components such as flame-grilled hamburgers and Philly steaks, pizza toppings, branded and processed meats, appetizers, prepared meals, ethnic foods, flour and corn tortilla products and meat dishes.

In addition, our foreign chicken production operations in China include two processing plants and two feed mills. The processing plants include various phases of harvesting, dressing, cutting, packaging, deboning and further-processing chicken. The feed mills and broiler hatcheries generally have sufficient capacity to meet the needs of the foreign chicken growout operations.

We believe our present facilities are generally adequate and suitable for our current purposes; however, seasonal fluctuations in inventories and production may occur as a reaction to market demands for certain products. We regularly engage in construction and other capital improvement projects intended to expand capacity and improve the efficiency of our processing and support facilities. We also consider the efficiencies of our operations and may from time to time consider changing the number or type of plants we operate to align with our capacity needs.

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