Contract farming and the rise of vertically integrated operations has led to some consolidation in the poultry meat sector over the past three decades but not as far-reaching as in other agricultural industries. Statistics from a new United States Department of Agriculture (USDA) report shows the midpoint broiler farm in the United States (US) grew from 300 000 birds in 1987 to 480 000 in 1997. It then rose to 680 000 birds in 2012, representing a 127% rise over 25 years.

Consolidation more prominent in arable and dairy sectors

Authors James McDonald, Robert Hoppe and Doris Newton say that while there has been consolidation in the poultry meat sector, it is even more pronounced in the arable and dairy sectors. This is due to the poultry meat sector undergoing striking changes in organisation and technology well before the series of reports started in 1987.

Rising egg production

Egg production has grown significantly from a midpoint egg farm of 62 000 in 1982 to 117 839 in 1987 to 925 975 birds in 2012. This represents a 686% increase over the time-frame, although there was evidence of a slower rate of growth between 2007 and 2012.

The study also showed increased specialisation in the livestock commodity sector with 52% of poultry production in 2015 occurring on farms with no crop production. This is due, say the authors, to poultry manure being lighter than other manure and easier to transport, which makes it more likely that a contract poultry operation could dispose of all its manure off the farm, further discouraging the growth of on-farm crops.

Multiple businesses

The report also highlighted the integration of poultry firms, providing an example in Tyson Foods, which operates 62 broiler hatcheries. Chicks from the hatcheries are delivered to broiler grow-out operations that raise the birds to market weight under contract. Tyson provides the contract growers with chicks from Tyson facilities and delivers the finished birds to Tyson processing facilities. Egg and turkey production follow different models, with major firms more likely to own and operate production facilities. For example, Butterball, which accounts for 20% of US turkey production, operates its own hatcheries and production facilities. – Poultry World