The report analysed the relationship between contract farmers and poultry businesses and concluded that live chicken production remained an “attractive farming enterprise”. The study represented data from companies responsible for around 92% of poultry production in the US and was viewed to be fairly representative of the sector.
It showed poultry farmers generally earned more than most farmers and usually had a higher household income than the average US home – around $51,939, according to the US Census Bureau.
The conclusion chimed with a farm financial survey from the US Department of Agriculture in 2011, which reported that broiler producers usually had “significantly higher incomes” than other farming enterprises.
“Viewed in totality, live chicken production is a viable, mutually beneficial and attractive farming enterprise for the vast majority of farm families who raise chickens, in partnership with the companies they work with,” said economist Dr Thomas Elam, the study’s author and president of FarmEcon LLC.
Long waiting list
The report was designed to capture live poultry production data and also summarised the key trends in areas like broiler production efficiency, returns and loan control statistics.
With the strong financial benefits linked to contract poultry production, a majority of the surveyed big chicken businesses said they had a long waiting list of prospective contractors. In total, companies were reported to have 1,858 applications from live poultry producers eager to strike up partnerships or expand operations.
The study also showed that the welfare of birds was better maintained within a contract farming structure. In 1925, around 18% of a flock in a US broiler system was not expected to make it to slaughter. Now, 95.7% of birds are believed to make it from gate to plate, according to an unreferenced 2014 study, cited by the NCC.
Astride with technology
“As a farmer and a businesswoman who has been raising chickens for 28 years, the current contract structure has allowed me to not only raise chickens, but raise my sons on my family farm, teach my children and grandchildren how to care for animals, and given me the ability to keep up with technology,” said Jenny Rhodes, a chicken farmer and poultry extension agent at the University of Maryland. “I’ve always had good relationships with the company I’ve contracted with, as we both have the same goal – to raise the healthiest chickens possible.”
Other noteworthy trends in the report showed contract poultry producers had a tremendous amount of loyalty to the companies they supplied. Over 50% stayed with the same business for more than a decade and almost 75% had been with the same company for five or more years.
More than 95% of the poultry farmers that did not retire stayed with the same company in 2014, according to the study. Of those that did walk away after their contract, 250 struck up deals with other firms to continue raising chickens.