Chicken Big Getting Littler?

NASS Numbers Show Decline in
Rockingham Co. Poultry Production

Andrew Jenner
Virginia Correspondent

ROCKINGHAM COUNTY, Va. — Though Rockingham County is still the undisputed king when it comes to broiler chicken production in Virginia, the latest numbers from the NASS Census of Agriculture suggest King Rockingham is getting old.

The county’s 2007 total of $78.9 million in broiler chicken sales accounted for 31.7 percent of the statewide sales that year, according to NASS figures. The Rockingham sales total, however, has fallen by 33.3 percent since 1997, when the county’s $118.3 million in total broiler sales approached half of Virginia’s overall broiler sales.

Over the same period, Rockingham County’s inventory of broiler chickens fell by 23.2 percent, from 17.5 million birds in 1997 to 13.4 million birds in 2007, according to NASS.

“[Poultry] is going to be a little bit less of our county agricultural base every year,” said John Welsh, unit coordinator for the Rockingham County Extension Office.

Welsh, who characterized local poultry industry as a “sunset” industry, attributed the decline in chicken production and sales to increasing land prices, development pressure and an aging infrastructure.

Also of note: the NASS statistics (released in early 2009) only run through 2007, before ethanol mandates and a global recession took a toll on the entire industry.

“2008 was one of the worst years in the history of the poultry industry,” said Hobey Bauhan, president of the Virginia Poultry Federation. Bauhan said the biggest factor was federal ethanol policy that significantly inflated the price of corn and, by extension, poultry feed. When the subsequent economic recession deflated foreign and domestic demand for chicken, poultry companies responded by cutting back on production, he said.

Nevertheless, Bauhan said the local poultry industry hasn’t entered a decline.

The Valley’s location, he said, within easy reach of the major East Coast population centers provides a strong and lasting advantage. He said the increasing number of poultry companies with local operations – risen from four to seven over the past decade – is another positive indication.

“We’ve been fortunate in Virginia that our industry seems to be weathering this storm, as painful as it’s been for our processors and producers,” Bauhan said. “Looking forward, I’m optimistic about the poultry industry in the Shenandoah Valley.”

The NASS statistics remain, however, and they don’t come as much of a surprise, to Dennis Lantz, a broiler grower from Bergton, Va., with decades of poultry industry experience. Since the 1980s and 1990s, when the local poultry industry was booming, a number of barriers have increasingly dissuaded young growers from completely replacing an older generation of retiring farmers. These obstacles, Lantz said, include rising costs to build and maintain poultry houses, rising land costs and increasing zoning and environmental restrictions.

Another significant factor Lantz mentioned is Rockingham County’s aging industrial infrastructure, with the two-story, or “double-decker,” poultry house as a common example. As production methods and technologies have changed over the decades since most of the double-deckers were built, the design is fast becoming obsolete. According to Lantz and others, poultry companies have mostly, or entirely, stopped contracting with farmers who have double-decker houses. When faced with a requirement to upgrade their poultry houses, Lantz said, many farmers simply exit the business because of the prohibitive construction costs of a modern chicken house.

“It just seemed like making a large investment to raise chickens was a risky move,” said John Miller, a broiler grower for Tyson until 2005, when the company said he’d need a new house to remain with the company. Miller, who’d raised poultry in a double-decker house since 1991, said many growers like him left the business in recent years for the same reason.

Miller said that his double-decker chicken house had always been profitable, and that development pressure was the biggest factor in his decision to quit poultry. His could foresee future land-use conflicts arising as new houses drew nearer and nearer to his farm, which now lies just east of Harrisonburg city limits. New construction costs aside, Miller said, investment in a new poultry house that could draw him into conflict with neighbors and developers seemed unwise.

While broiler numbers and sales in Rockingham County have declined, they have risen in neighboring localities. Shenandoah County’s broiler chicken inventory increased by 26 percent from 1997 to 2007, while the inventory in Augusta County increased by 83 percent over that same period (by 2007, however, those counties’ combined production was still less than half of that in Rockingham County). This, Lantz said, is partly because poultry houses tend to be newer in these counties, where large-scale production caught on later than in Rockingham County. Also, as turkey production declined nearby counties (regional turkey production has also declined significantly, in large part due to Pilgrim’s Pride’s 2004 decision to leave the local turkey business), many turkey houses there were converted to chicken production. Finally, more intense urban and development pressures, plus higher land values factor into the decrease in Rockingham County’s broiler production while the industry has continued to grow in Shenandoah and Augusta counties, said Welsh, the county extension agent.

The local poultry industry has changed time and again, said Miller, who grew up on a small poultry farm (the recently announced pending sale of Pilgrim’s Pride to JBS S.A., a Brazilian meat company, represents another potential large change). Further changes now in response to new industry practices and changing demographics in the county doesn’t mean Rockingham County’s biggest agricultural industry is going anywhere anytime soon, he said.

“I don’t see chickens leaving at all,” Miller said. “I think there’s still money to be made if a person stays on it.”