Growers Need More Profit
For more than two years now poultry companies (integrators) have been enjoying record prices, which equates to record profits. Tyson recently announced more than $730 million in profits last year; Pilgrim’s announced more than $570 million. All of this with the price of cor,n their main feed ingredient, at record highs. Recently, the price of corn has dropped considerably and poultry prices at the grocery store have increased.
But none of those record company profits have been shared with the farmers who toil daily to raise that chicken and turkey for the American consumer and a considerable portion of the rest of the world. No significant base-pay increases that were not essentially “bought” first by the growers have come around in almost 20 years! Bought first refers to growers being required to make improvements to their facility before receiving a pay increase. Recent company required improvements cost so much that it will take the grower as much as 15-20 years just to get their money back with the pay “increase” the companies are offering.
Who out there wants to be living on what they were making in 1994, considering the rate of inflation especially on fuel? Propane to heat our poultry houses, which for most is our biggest expense, was $.70 a gallon or less in 1994. This past winter some growers had to pay over $3 a gallon. Electricity rates have increased almost 40 percent during that time. Selling 1 pound of chicken today wholesale pays all of their costs for the whole bird. So with a 4-pound chicken, their costs are covered in the first pound and the other three pounds are profit for the companies.
Do we need the integrators? They are huge companies that control virtually all of agriculture in this country. And they have helped make a significant contribution to our local economies with the help of the farmers who have raised their birds. But where would they be without the farmers?
The time has come for these giant corporations to share more of the profits with us farmers, who are keeping them in business so we can stay in business. Growers need a raise of 2-cents per pound now! When you purchase chicken at the store that is at least $2 per pound, the grower who spent 5-6 weeks or more raising that chicken gets just 5 cents! Sales tax you pay amounts to more than the farmer is paid. When you purchase a 12-piece chicken meal at KFC or a similar restaurant you pay about $29 or $30 for that meal. Of that, the restaurant grosses about $22 or $23, the company they purchased the chicken from gets $5 or $6, and the grower, whose time working with that bird was many times more than anyone else involved, grosses about 30 cents. How is that fair?
The pay increase we need amounts to an increase for the consumer of 8 cents for a whole 4-pound chicken, or at the most, 16 cents for a big roaster. Most will never notice that increase, and I believe consumers will gladly pay that much more if they know it is going to the farmer who raised that chicken. For many farmers it will mean the difference between staying in business or possibly losing the farm.
Mike Weaver, president of the Contract Poultry Growers Association of the Virginias, lives in Fort Seybert, W.Va.