Md. poultry industry falls behind pace set by U.S.

State sector grows 7% in decade when gain nationally was 37%

September 19, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

Maryland's nearly $613 million poultry industry has failed to keep pace with the nation's growing production of chicken over the past 10 years, industry officials said yesterday.

U.S. poultry production rose nearly 37 percent from 1991 to 2001, while Maryland's production grew by 7 percent in the same period, according to figures compiled by the National Chicken Council.

Maryland also failed to keep pace with neighboring states. Over the same span, Delaware's chicken industry grew by 9 percent and Virginia's increased by 24 percent, due to major expansion in the Shenandoah Valley.

Other numbers show the situation is worse for the Delmarva region. Broiler production has declined nearly 6 percent in Delmarva over the past five years, according to Tita Cherrier, a spokeswoman for Perdue Farms Inc., a major poultry producer based in Salisbury.

"The decline started in 1997, when we had the threat of increased regulations in response to Pfiesteria," she said, referring to the outbreak of toxic microbes that resulted in the closing of parts of three Chesapeake Bay tributaries. At one point, the outbreak was thought to be linked to farm runoff that contained chicken manure.

Since 1997, Cherrier said, the industry has lost about 300 farm families raising chickens because of the uncertainty within the industry. "Farmers need stability before they go out and put a 15-year mortgage on a $150,000 chicken house," she said.

George "Bud" Malone, a poultry extension specialist with the University of Delaware, listed a number of other reasons for the declining growth of Maryland chicken business.

"The cost of production is higher in Maryland than other parts of the country," he said. "Maryland has higher taxes and higher labor costs."

Malone also said that Maryland grain farmers have been unable to meet the poultry industry's need for corn and soybeans, forcing processors to bring more feed grains from the Midwest at a higher cost.

And, he said, other states are friendlier to the chicken industry, and there are less environmental pressures.

Kentucky is good example of what Maryland is up against in attracting new investment. Kentucky has not only welcomed chicken farmers and processors, it has offered lucrative incentive packages to attract the industry, said William Roenigk, senior vice president of the National Chicken Council.

He said Kentucky has attracted more than $600 million in investment in poultry processing plants, feed mills and hatcheries in recent years as the state has looked for an alternative to its big tobacco industry, which is in decline.

The state has offered tax credits and incentives totaling $165 million to lure poultry producers, including $30 million to Perdue Farms for a new processing plant in Cromwell.

Roenigk said Kentucky's attitude toward the industry contrasts with Maryland, where he said the industry is told: "We want you, but you have to live by a more stringent set of rules, because it looks like you are the cause of an environmental problem, even though the science is inconclusive."

Kentucky's poultry industry has increased by more than 1,000 percent since 1991, while Georgia, Arkansas and Missouri have posted gains ranging from 19.5 percent to 115 percent, Roenigk said.

Maryland's shrinking share of the poultry market has caught the attention of state agriculture officials.

Because the chicken business is such a major part of the Eastern Shore's farm economy, "state-level policies that can promote the continued viability of broiler production in Maryland are crucial," noted a $200,000, two-year study by the University of Maryland, College Park.

The study, on the economic prospects for Maryland agriculture, warned against any new regulations that would make it more difficult for the state's poultry companies to compete with those in other parts of the country.

Poultry is a $612.8 million business in Maryland, and it's estimated that half of the 14,000 processing plant workers and 2,500 farm families raising birds for these plants are from Maryland.

"Poultry is the lifeblood of Maryland's agriculture community, and agriculture is the lifeblood of the Eastern Shore economy," said Lewis R. Riley, a former state agriculture secretary who operates a chicken farm near Parsonsburg.

Douglas W. Green, a Princess Anne farmer and a poultry representative to the Maryland Agricultural Commission, told members of the governor's advisory group last week that he was concerned about the aging of the industry's plants in Maryland.

"At some point they are going to have to spend a lot of money to upgrade these plants," he said, adding that whether they do or not "could depend on how friendly Maryland is toward business."

There are, however, indications that the three poultry companies with plants in Maryland (Perdue, Tyson Foods Inc. and Allen Family Foods) are not neglecting their facilities here.

"We're not seeing new buildings going up, but it doesn't mean the industry is not spending money to update their plants and on new technology," said William Satterfield, executive director of Delmarva Poultry Industry Inc., a regional trade group.

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