'Big chicken' gets smaller

Our view: As the ranks of chicken processors dwindle, Maryland farmers would be wise to tap their proximity to urban markets

July 05, 2011

There was a time, Maryland Secretary of Agriculture Earl F. Hance recalls, when a beginning Maryland farmer could put a few chicken houses on his land and be assured that the income from them would pay off his farm.

Those days are gone, replaced by what the agriculture secretary calls anxious times for the state's chicken farmers. The sway of "big chicken" — companies like Perdue, Mountaire and Tyson that process the chickens that Delmarva farmers raise — got smaller recently, when Allen Family Foods Inc. of Seaford, Del., announced it would file for Chapter 11 bankruptcy and said it was selling many of its assets. Allen, which had been in business for 92 years, said it suffered from a prolonged price squeeze. The cost of corn and soybeans, primary ingredients in chicken feed, continued to shoot skyward, while a surplus of broilers kept the market price of chicken depressed.

While the sky is not falling on the poultry industry, the outlook is not especially sunny. A worldwide shortage of grain, coupled with forecasts of a less than bountiful American grain harvest this year, are keeping the price of feed high. The vertical integration of chicken farming, a process that moves the animals from eggs to market-ready chicken in an astonishingly short span, has also done an efficient job of producing an immense supply of cheap chicken.

It might be too cheap, as a number of closings, such as the shutdown of a Tyson plant in Berlin in 2003, and bankruptcies, such as the one filed in 2008 in Texas by Pilgrim's Pride (then the nation's largest chicken producer), continue to buffet the industry. As Bill Satterfield, executive director of the trade group Delmarva Poultry Industry Inc., told The Sun's Jamie Smith Hopkins, the majority of chicken companies in the United States are losing money.

In Maryland the disappearance of a producer like Allen means that its competitors can now "go shopping," looking to sign contracts with farmers who have new chicken houses and modern equipment. With fewer producers offering contracts, the farmers who have invested thousands of dollars in their chicken houses — low-ceiling structures that have few other uses — have little negotiating room .

It is a cautionary tale of what can happen in industrial agriculture: Investing heavily in one crop comes with steep costs. If that crop has a hiccup, you can get seriously ill.

Secretary Hance says that rather than erecting chicken houses, a new farmer would be wise to tap into one of the state's strengths: the proximity of farmland to large population centers. Maryland farmers who plant a variety of crops and ship them to nearby markets could do well, he said. Lucie L. Snodgrass, who wrote "Dishing Up Maryland," a 2010 cookbook that relied on locally grown ingredients, has observed that "Maryland is an ideal niche crop state; we have all these people living close by, so farmers can sell things to them at a decent prices."

In many ways, the modern farm-to-table movement mirrors the Maryland truck farms of a bygone era. The specifics of how the goods get to market have changed, but the core idea — shipping the bounty of Maryland farms to its nearby cities and suburbs — remains the same.

Farm-to-table might not offer immediate help to a grower with massive chicken houses and the mortgages that typically go along with them, but it could be a promising path for other men and women who till the soil.

Big chicken won't disappear, but in the future it could well share the state's farm spotlight with big zucchini.

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