Something to Crow About

By wmadministrator

Chicken houses on the Lewis Farm in Cumberland County in south-central Kentucky. Lewis raises birds for the Equity Group-Kentucky Division LLC, formerly known as Cagle. Poultry is the top farm-food commodity in the commonwealth and challenges equine as the state’s top agribusiness income generator.

Kentucky’s poultry industry has taken flight the past 20 years. “In 1990, Kentucky’s commercial poultry industry produced about 2 million birds per year. Today we produce over 300 million,” explained Melissa Miller, executive director of the Kentucky Poultry Federation. “Poultry is a major player in Kentucky’s agriculture economy, which goes largely unrecognized.”

Chickens rule the roost, in fact, in generating farm income.

The USDA 2007 Census of Agriculture, which occurs every five years, found the poultry industry as the largest ag sector in Kentucky and ranked it the No. 1 food commodity in cash receipts. The USDA 2007 Ranking of Market Value of Ag Products Sold report has Kentucky’s poultry and eggs receipts at $978 million. Equine, the traditional flagship agriculture sector, trailed at $952 million.

“That USDA number doesn’t even begin to account for the economic impact the industry has in our rural communities, where so many of these farms and complexes are located,” said Miller.

A new broiler belt
The growth in the poultry industry can be seen while driving the rural roads of western Kentucky where the poultry houses are now almost as common as the fields of grain that blanket the landscape.

“Back in the early 1990s is when people began to see the poultry houses being built in Western Kentucky,” explained Tony Pescatore, extension professor in the Department of Animal and Food Sciences at the University of Kentucky College of Agriculture. “The traditional broiler states were getting saturated, and because of the characteristic of Western Kentucky, some of the poultry companies that were looking to expand slowly moved in the area, along with Tennessee and Missouri, opening up a new broiler belt.”

Poultry companies, he explained, were looking for a reliable water source, waste treatment facilities and prime locations close to markets. Western Kentucky had these attributes going for it, plus it is a big producer of corn, the main feed ingredient for broilers. The large number of farms in Kentucky and their relatively small size provided a base of potential contract poultry producers.

By the mid-’90s, Kentucky had two major poultry operations in place: a broiler operation, Seaboard (which is now Pilgrim’s Pride), in Mayfield in the west and a breeder operation, Avian Farms (now Cobb-Vantress), in Monticello in the south. By the mid- to late 1990s, three other poultry broiler operations were added to the list with Cagle’s (now Equity Group-Kentucky Division LLC), Perdue and Hudson (now Tyson).

Each of the poultry companies that settled in Kentucky played a role in local economic development not only by contracting with farmers and making over $91 million in grower payments in the last year, but also with the jobs created at the facilities. Miller estimates the companies employ over 7,000 people and pay an estimated $133.8 million in salaries that then turn over in the local economy.

“The Cromwell Complex (in Ohio County) is positioned in an area that allows us to better service areas like Chicago, Detroit, St. Louis and other major Midwestern cities,” said Lyden Hughes, live production manager for Perdue Farms Inc. “The location, along with an abundance of locally raised grain and small family farms, allows us to run a business that is not only a good fit for Perdue but also a good fit for the communities in which we do business.”

Along with the local jobs created at each, the six company feed mills also provide a market for area grain. Pescatore estimates the poultry industry uses a third of the corn crop, making it the largest end user of corn in Kentucky other than potentially the ethanol plant in Hopkinsville.

“If you look at where the poultry industry is located, it is in the heart of Kentucky’s grain production,” said Pescatore. “This has served two purposes over the years: The grain producers provide the necessary feed stock, and they are also an end user for the litter (chicken waste, wood chips and sawdust), so we do not have that problem with disposal that other states have had.”

Though expansion of the commercial poultry industry in Kentucky has tapered in the last few years due to the economic challenges facing the nation, the commonwealth remains a strong leader in the industry.

“The poultry industry in Kentucky is a profitable industry for the individual companies and thus the farmer,” said Pescatore. “We are still at 100 percent of our production, while other states have been cut as much as 4 to 5 percent.”

Flocking to the family farm
“When it comes to the commercial poultry industry, we have about 850 farms with about 2,800 houses across in 42 counties,” explained Miller. “These are family farms, not large corporate farms. This industry has allowed many of our small farmers to continue to farm and keep the family farm alive.”

Loraine Buckingham, of Hidden Hills Poultry in Fulton County, is a believer in Kentucky’s poultry industry and how it’s helping the family farm.

Buckingham was born and raised on her family farm outside Fulton, Ky. After inheriting a portion of the operation, she and her husband, Butch, continued to raise beef cattle on the farm along with hay and grain to feed the cattle.

“I loved the beef cattle industry, but the bottom dropped out of the market in the early ’90s, and we held on as long as we could economically,” said Buckingham. “I had already taken a public job, and my husband had taken a part-time public job all to support our ‘hobby’ of raising cattle, and we decided it was time to get out.”

The Buckinghams sold their cattle in 1992, and decided to lease out their land and focus on their public jobs. Then, after talking with her brother, who was looking to build poultry houses, Buckingham decided to take out a loan and begin construction on six poultry houses on the family farm. Loraine might have been the one wanting to make the move into the poultry industry, but it has definitely become a family affair at Hidden Hills Poultry.

“I’ll be the first to admit this hasn’t always been easy, but in so many ways it has been a blessing,” said Buckingham. “It is an investment for mine and my husband Butch’s retirement, but above all it has allowed our son Stacey to come back home and build a future for himself here on the family farm.”

Nancy Butler, a poultry producer in McLean County, also turned to the poultry industry to allow her and her siblings to keep the family farm.

“We had a small grain operation, some cattle and tobacco, but in the late 1990s the cuts in tobacco took our base down to nothing,” explained Butler. “We were at a point where we were going to have to sell the family farm because it wasn’t profitable, but we are still farming today because we decided to put two poultry houses on the farm.”

For young and beginning farmers who would have turned to tobacco in the past for a high-cash crop to get started in farming, poultry has been the way to make farming profitable.

“I purchased my grandfather’s farm in 1990s, and like everybody else I raised tobacco on the weekends and at night to make it profitable,” said Roger Shocklee, a McLean County poultry producer. “In December of ’96, my first two houses went into production, and my farming operation has grown from there.”

Shocklee has given up on tobacco and today owns four poultry houses, raises cattle and cash hay, plus he started a poultry litter business in which he employs one individual.

“I went from owning only a tractor and truck and paying on a small farm and house, to all of this in just 15 years,” said Shocklee. “Don’t get me wrong; it hasn’t been easy. Poultry farming is a lot of work, but it was a great opportunity for a 29-year-old who wanted to get into farming with limited land in this part of the state.”

Something to crow about
The commercial poultry industry does not have the elegance of the equine industry or the far reach of the beef industry in Kentucky, but poultry producers feel it is time the state recognizes the industry for what it brings to Kentucky’s rural communities and the economic impact it has on the commonwealth at large.

“There are so many misconceptions in the public about the poultry industry,” said Butler. “My poultry houses are considered confined animal feeding operations (CAFO), and people still believe the old stories that animals are mistreated and waste is being dumped by all CAFOs. Nothing could be further from the truth.”

Butler explained that poultry operators are not only trained and certified on how to care for the birds, but they also have to adhere to strict guidelines on everything from waste removal to the care of the land around the buildings. Strict biosecurity and safety measures are in place at all farms to ensure that birds and people alike are kept safe from illness.

“All farmers care about their livestock, be it horses or chickens, because this is how they make their money,” said Shocklee. “We farmers are also the first environmentalists, because we don’t want to put anything on our land that would harm our animals, production or our families. Yet a few bad actors have put a black eye on the poultry industry, and so now many people make the assumption we are all careless producers.”

Shocklee admits that, as with any industry, there are factors that could be cause for public concern, such as the disposal of litter. Yet throughout Kentucky, chicken litter has become a source of local fertilizer for many area grain farmers who formerly had to depend on petroleum-based fertilizers shipped from overseas.

In fact, once a product poultry producers paid to have removed from their houses, litter is now a source of extra income as crop farmers increasingly have seen the production and cost benefits of using it in their fields.

Kentucky’s poultry industry is looking at other ways to help producers go green in their operations, with an energy project funded by the Kentucky Agriculture Development Board.

“We contracted with UK’s Department of Biosystems and Ag Engineering and the Department of Animal and Food Sciences to create a team that goes out to selected growers working with each company and does an evaluation of different systems on the farm,” said Miller. “Once we finish those evaluations, we do a full educational workshop with all of the producers within that complex to explain ways poultry operations on the farm can become more energy efficient.”

Along with the energy evaluations, poultry producers can take advantage of low-interest loans through the Kentucky Agricultural Finance Corp. to make the necessary energy upgrades to their operation or expand their current poultry facilities.

“What it all comes down to for those of us in the industry is that we would like people to see what a positive impact this industry is having on Kentucky,” said Shocklee. “The poultry industry in this part of the state is an economic engine. I mean, if the old theory holds true that a dollar rolls over five times in a community, then look at what poultry has done in the last 15 years here in McLean County and around Kentucky.”

Poultry’s Financial Impact

Infrastructure
The poultry industry has made a large investment in facilities. It includes:
five broiler hatcheries, two primary breeder hatcheries, six feed mills,
four processing plants, three layer complexes and a protein conversion plant. Production also goes to 2 plants in Tennessee and Indiana.

Rankings
• No. 2 agricultural commodity in Kentucky,
• No. 1 food commodity
• No. 7 in the nation in terms of broiler production

Economics
• $814 million industry
• 15.5 percent of the product being produced is exported, meaning that $108.5 million per year is coming into Kentucky from international trade.
• 7,000 industry employees
• Pays out $133.8 million in salaries and wages and over $91 million in grower payments
• 30 percent of workforce is supervisors, skilled maintenance, professional truck drivers and quality assurance technicians.

Farms
• 850 poultry farms, with 2,800 poultry houses in 42 counties
• The average poultry farm is owned and managed by a family farmer and consists of less than five poultry houses.
• Many farmers enter the business to diversify their revenue because of their concerns about tobacco’s future.

Poultry-Related Agribusiness
• Kentucky’s poultry industry uses 29 percent ($74,709,384) or 35.8 million bushels of Kentucky’s corn crop.
• 32 percent or 335,000 tons of its soybean crop
• Kentucky’s grain farmers realize a 10-15 cent per bushel premium from poultry, giving them a $10-$15 million bonus for their grain.

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