Poultry farmers on edge Production cuts By Merritt Melancon  |
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Originally published in the Athens Banner-Herald on Sunday, January 11, 2009

Americans eat more chicken than any other meat, but despite the popularity
of their product, chicken producers have struggled over the past year and
now are cutting back production.

That's bad news for growers in Northeast Georgia, the cradle of state's
largest agricultural industry. Already losing money due to the rising cost
of raising chickens, many poultry farmers are holding their breath, waiting
to see if they will have any chickens to raise at the end of 2009.

"Put it this way," said Terry Stephenson, a Danielsville grower with seven
chicken houses. "Have you ever seen the economy this bad? Well, I've never
seen the chicken industry this way, either."

Farmers who own chicken houses get paid to house flocks of chickens for
producers like Pilgrim's Pride or Harrison Poultry. The larger companies
deliver chicks to their farms every two months or so and supply them with
feed. The farmers keep the birds fed, clean and warm.

Chicken producers still are reeling from last summer's historic spike in
corn prices - $7.50 a bushel, compared to just $2.50 in 2007 - combined with
record prices for diesel fuel and changes in international trade, said John
McKissick, director of the University of Georgia Center for Agribusiness and
Economic Development.

At the same time, consumers stopped eating out as much - and demand for
chicken fell, said Richard Lobb, spokesman the National Chicken Council.
About 45 percent of the nation's chicken is sold in restaurants.

By the end of 2008 American poultry producers had their monthly production
by about 10 percent in an effort to rebalance the market, Lobb said.

As high prices and low demand really began hurting the industry, Pilgrim's
Pride - which has two processing plants in Athens and produces broilers at
378 farms in Northeast Georgia, filed for Chapter 11 bankruptcy after losing
$1 billion over the course of the year.

Pilgrim's Pride, based in Pittsburg, Texas, was the largest chicken producer
in the nation when 2008 began, but cut production throughout the year as it
struggled to avoid bankruptcy, said Ray Atkinson, a company spokesman.

The company will end night-shift chicken production in Athens starting Feb.
9 - leaving between 80 and 90 people without jobs - and will cut ties with
10 percent of their poultry producers in Northeast Georgia.

The company will deliver the bad news to producers by Feb. 10, and the
decisions on who to cut will be based on the farmer's past production,
Atkinson said. About 45 northeast Georgia farms will lose their contracts,
Atkinson said.

"It is difficult, and it's painful," he said. "We certainly understand that
it affects people's livelihood, but it's for the longevity and to protect as
many jobs and as many producers as we can."

But even producers who aren't growing for Pilgrim's Pride or those who are
sure they aren't losing their contracts complain that the chicken business
has gotten tough.

Chicken farmers started seeing their houses go vacant for longer periods
between flock deliveries or started to see fewer chickens delivered in each
flock early in 2008. Both changes decreased the number of birds raised on
their farms each year, and fewer birds means less money.

Bogart chicken farming veteran Steve Crowe has been raising chickens for 30
years. He's five years from paying off the last of his seven chicken houses.
A sharp increase in the amount he spends to heat his chicken houses over the
last several years and the gradual decrease in the number of chickens he
received in each flock has him worried.

"We're good right now," Crowe said. "But you worry what will happen in a few
months if this thing doesn't turn around. ... If they cut an entire flock of
birds, even though I'm this close (five years) from paying off my houses,
I'd have restructure my loans. Then if they miss one flock, what's to keep
them from cutting down to two, three a year."

In the last eight years, as new subdivisions pushed further and further in
to the rural areas surrounding Athens, more and more chicken farmers felt
pressure to sell off their land for development. This recent downturn is
just going to put more pressure on some farmers to get out of the business,
Crowe said.

But he and other long-time chicken farmers are in it for the long haul.

"Hopefully, by the end of spring we'll see this all settle out and the
prices go back up," Stephenson said. "It's not the end of the industry.
People are always going to be eating chicken."

Dr. Teri Hamlin
North Region Agriculture Education
Georgia Department of Education
204C Four Towers University of Georgia
Athens, Ga 30602
706-542-3679 / 706-540-0032
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