Saturday, December 7, 2013
- Chicken and turkey farming in the United States is not what it used to be.
Poultry companies say the old days of small chicken farms are gone. Rather than a farmer keeping chickens on the range and selling them to various markets, today’s world of poultry farming requires a grower to contract with a corporation to keep tens of thousands of birds in tightly confined barns.
But farmers in southern U.S. states — from Texas to South Carolina — say the current system of poultry rearing favours corporations at their expense.
The same system that provides cheap turkey and chicken for the U.S. dinner table and sends millions of pounds of meat overseas relies on family farmers to take huge financial risks for multi- million-dollar companies.
The system works like this: A corporation provides chicks, feed, and any medication needed to a farmer who puts up the barns. Farmers get a variable, market-driven fee from the company when they return grown flocks for slaughter.
But more than a few farmers say they get so deep in debt after they build the barns, that it takes years to turn much of a profit — if all goes well.
It can easily cost more than 100,000 dollars to build one chicken or turkey house, which means that farmers need a consistent flow of birds to help them pay debts. But companies often do not guarantee a supply of the same number of birds each year.
Growers say agricultural firms can leave them high and dry if a disease affects a flock. Some contracts allow farm companies to stop supplying birds as long as they provide 30 days’ written notice. Critics say it’s a scary prospect when companies do not offer more guarantees.
“When you’ve taken all the risk and put up 250,000 dollars’ worth of chicken houses and gotten loans out for their construction, it creates an unlevel playing field,” says Harry Smith, an organiser of Farm Aid, a fund-raising concert that focuses on the plight of small farmers.
Spokespersons for Perdue Farms, Goldkist Inc., and Columbia Farms Inc., the major players in South Carolina’s broiler chicken industry, say they generally have no problems with growers and that it is only in extreme cases that a farmer would be cut off. Circle S, a major turkey corporation, echoes these sentiments.
“If it was such an awful business to be in, why do farmers literally wait in line to build chicken houses for us?” asks Perdue Farms’ Dick Auletta.
The Canada-based Rural Advancement Foundation International (RAFI), a group that closely follows the industry for small farmers, says the long-term reality is anything but lucrative for the farmer. In addition to the initial debt, the farmer often has to take out more loans to make improvements to barns in order to abide by company requirements.
South Carolina farmer Reece Holley, 35, owes 300,000 dollars in farm-related debt and is struggling to keep his family on land his ancestors purchased after the Civil War.
A disease known as spiking mortality wiped out some of his turkey flock last year, and he is scared the company he contracts with will not stick by him. Forty-five turkey farms across North and South Carolina have shut down because of the disease. The illness causes the birds to lose weight, even though they continue to eat. It poses no threat to humans.
Jib Taylor also knows about the risks. He spent 22 years farming turkeys on hilly land near this small town, only to learn in 1991 that he would lose the contract on which he had built his business.
When the company stopped sending turkeys for Taylor to raise, his poultry farm shut down. Taylor struggled to pay off 10,000 dollars in loans he had taken out to upgrade the poultry barns.
“They walked out on me,” Taylor says of the farm corporation, Circle S.
Circle S executive Mitch Deese refused to discuss Taylor’s case specifically, but said his firm would not fire a contractor unless the farmer had consistently been below company standards.
Poultry companies say contracts are not as specific as some growers would like them to be, but that corporations need chicken farmers as much as the farmers need them. The companies say complaints come either from a few disgruntled farmers who do lousy work or from farmers who expect too much.
Chicken farmer Mildred Bell who has been in the business for about two years with Goldkist Inc., says she believes she will earn a decent living from her 60,000-bird farm. “You’ve got to follow their rules, but I understand they have to have some control over what’s being offered to the public,” she says.
Even in a good year, however, farmers earn peanuts compared to corporations, according to RAFI. While farmers net an average of 16,000 dollars annually, poultry corporations reap 20 percent to 30 percent profits in good years, a recent RAFI newsletter says.
Poultry companies say the old days of small chicken farms are gone for a reason: People have an almost insatiable demand for poultry products.
Federal statistics from the National Broiler Council show that the average person in the United States eats 89 pounds of poultry annually, compared to 68 pounds of beef. In 1960, people ate 34 pounds of poultry, compared to 63.3 pounds of beef.
U.S. companies also export poultry parts to overseas markets, where they find that dark meat is highly popular. Perdue Farms says it supplies chicken legs and leg quarters to Eastern Europe, China, Japan, and Hong Kong from its processing plant in Dillon, South Carolina.
The overall demand causes corporations to impose certain standards on growers, companies say.
Industry officials and bankers argue that the contract poultry system is best used when a farmer has another source of income. A chicken or turkey farm often will be run by a husband and wife, one of whom works off the farm during the day.
Organisers of Farm Aid concede that the system is great for consumers, because it keeps prices low. But more than a few farmers get squeezed.
“We’re not saying let’s overhaul the whole system of contract poultry growing, but increasingly, the contracts that producers are signing are tilted unfairly toward the large companies,” Farm Aid’s Smith says.