Porker, you don't have to own a packing plant nor do you have to be a co-op. The reason is that the producers (ranchers, pork producers, or chicken farmers) CAN form a co-op and demand the prices they get for the supplies they produce. They don't have to.
The requirements for processors is that they pay you the same as they are paying others for like goods.
In the case of processing and you owning the goods on the other side of the processor, the rule for processors is that they "charge" you the same as they charge everyone else. That is your protection under the Packers and Stockyards Act (properly enforced).
The problem comes in when the processors own the processing, and also the goods out the other end.
In your case, you own the goods on the other end of the processor. The additional profits you get from the market by your efforts are your own.
The problem with big processors is that they do not let you own the cattle on the other side when it turns into beef. They don't even let guys like you have "rail" space. They control the supply in a given area by controlling both aspects and limit your ability to own and sell your own beef.
"Bad" processors limit who they will process for and so limit the rail space available to people like you. If you own a big pig farm, for instance, the processors can just say, "we will not process your pigs at all". In this way, they control the supply of pork on the market and only let the market be THEIR market because they control all the supply coming from their plants.
I would agree with you that I wouldn't want to be a processor either, and you don't have to be. You will have to make sure your beef, pigs, or chickens do get processed, however.