Poultry Facts

• Mississippi’s poultry sector exceeded $2.4 billion in sales at the farm gate in 2010.
• Total sales of poultry products by Mississippi processors in 2010 exceeded $2.8 billion.
• Mississippi is home to Cal-Maine Foods, Inc., the largest egg processor in the world.
• Mississippi produced 757 million broilers in 2010, or 1,441 broilers per minute.
• A Mississippi chicken weighs between 3.8 and 8.5 pounds when slaughtered, depending on the target market.
• Chicken feed is 60 per cent corn and 18 per cent soybean meal.
• Mississippi chickens ate nine billion pounds of feed in 2010.
• In 2010, 97 million bushels of corn were raised in Mississippi. Mississippi broilers consumed more than 89 million bushels of corn in 2010.
• Mexico replaced Russia as the largest purchaser of US poultry, with more than 967 million pounds shipped in 2010. The poultry export market is especially important for Mississippi because poultry is often shipped out of ports in the South.
• Mississippi 2010 poultry exports were valued at more than $314 million, or 11.2 per cent of total sales.
• The poultry industry in Mississippi employs more than 28,000 people directly and another 27,000 indirectly. In other words, the industry helps create more than 55,000 jobs.
• Wages and salaries paid to poultry employees in Mississippi exceed $1.19 billion. The poultry industry is responsible for creating approximately $960 million more in payrolls for other industries, due to economic activity generated by the poultry industry. The total impact is more than $2.15 billion in wages and salaries paid.
• The total economic impact as a result of the Mississippi poultry industry is more than $2.9 billion value-added in 2010. (Value-added includes wages and salaries, indirect business taxes, and profits.)

Overview of the Industry

The combined value of production from broiler, egg, turkey, and chicken sales in 2010 was $34.7 billion, up 10 per cent from $31.6 billion in 2009. Of that total, 68 per cent was from broilers, 19 per cent from eggs, 13 per cent from turkeys, and less than one per cent from chickens. The US poultry industry continues to be a major supplier of protein in the United States and the world.

The US poultry industry serves many markets. The first major market separation is between the domestic market and the export market. The American market prefers white meat, leaving most of the dark meat for export. The export market is affected by conditions such as oil prices, wars, natural disasters, currency fluctuations, political issues and other worldwide problems that are beyond the control of the poultry integrator.

The US market is further segmented into chicken for consumption at home and chicken for consumption in restaurants, schools and other institutions. Most of the white meat is further processed. Away-from-home meals and snacks captured 48 per cent of the US food dollar in 2010.

Poultry integrators must provide products processed specifically for each market segment. In the domestic market, prices are largely a function of input prices, other competing meat prices, and the status of the US economy. The past several years have been difficult for the industry due to high prices for both corn and soybean meal and a very slow-growing economy. Despite these challenges, poultry remains a good value for the consumer. Figure 1 shows the relationship between average retail prices paid for beef, pork, and poultry products since 2005. Poultry retail prices have remained almost constant while beef and pork prices have steadily increased.

Figure 1. Composite retail prices in dollars per pound

In the United States, per-capita consumption of broiler products continues to be more than consumption of beef and pork, its two main competitors. In 2010, the per-capita consumption of total broiler products reached 82.3 pounds. Per-capita consumption for broilers, beef and pork in the US totalled 189.6 pounds. Broilers constituted 43 per cent of the top three meats consumed in the domestic market in 2010. Table 1 compares per-capita consumption of broilers, beef and pork from 2000 to 2010.

Export Trade

The rapidly growing world population will be consuming two-thirds more animal protein by 2050 than it does today, according to World Livestock 2011, a study conducted by the United Nations’ Food and Agriculture Organization (FAO). Growing populations and incomes are fuelling the trend toward increased consumption of animal protein in developing countries worldwide. This increased consumption is helping to keep US poultry exports expanding. Broiler meat shipped in October 2011 totalled 689.7 million pounds. That was a 2.5 per cent increase from the same period in 2010, despite the fact that October 2010 shipments were the highest monthly volume recorded that year.

There are several notable differences in trade flows between 2011 and 2010. Shipments to Russia in October 2010 totalled 211 million pounds, which accounted for 31.5 per cent of the US broiler exports for that month. In October 2011, Russia banned US poultry imports, thus reducing imports to only 64.4 million pounds, a reduction of about 69.5 per cent.

However, other markets more than made up the decrease caused by Russia’s ban. For example, broiler shipments to Hong Kong totalled 55.7 million pounds in October 2011, a 45 per cent increase from the previous October. In October 2010, shipments to Angola totaled only 14.4 million pounds. However, one year later, these shipments rose to 60.5 million pounds, a 320 per cent increase. Secondary markets also imported more broiler meat in October 2011, offsetting the decreased shipments to Russia. Several regions, including Mexico, Cuba, Hong Kong, Angola, Japan, United Arab Emirates and China, imported more broiler meat from the United States than in 2011 than they did in 2010. Mexico, the top US broiler destination for 2011, imported almost 4 million pounds more in September 2011, while Hong Kong imported almost 30 million pounds more than it did the year before¹. The following table shows US broiler exports over the last five years.

History of Mississippi Poultry Industry

During the early part of this century, there was great interest in poultry breeds. Birds were selected and bred to produce a pure breed that would place high in poultry exhibitions. Breed purity was more important than performance. Poultry judges were prestigious and influential.

Some of the more popular breeds were Wyandotts, Dominiques, Orpingtons, Plymouth Rocks, Rhode Island Reds and Leghorns. There were many plumage and colour variations within most breeds.

The poultry industry began to mature during the late 1920s, when commercial poultry operators began cross breeding to improve bird productivity. Bird fanciers were horrified. They suggested that breeders who crossed breeds were admitting that they did not have the ability or patience to succeed in the purebred world. Some hold this view today, despite the fact that all scientific research shows that cross–breeding is a wise choice.

It was common in the 1920s through the 1940s for hatcheries to be located on or near the main streets of many Mississippi towns. Chicks were usually sold over the counter in small quantities. Most orders were for 10 to 50 chicks.

In the late 1920s, the State Poultry Federation served the poultry industry in Mississippi. There were more than 2,500 members in about 35 county associations and one area association, the Delta Poultry Federation. The Delta Poultry Federation had its annual poultry show at Indianola. In the 1930s, the Mississippi Hatchery Association and the Mississippi Poultry Federation combined to form the Mississippi Poultry Producers Association (MPPA), which eventually developed into today’s Mississippi Poultry Association (MPA).

The US Department of Agriculture (USDA) launched the National Poultry Improvement Plan (NPIP) in 1935 to control pullorum disease, commonly called bacillary white diarrhoea. Significant progress was made during the early 1940s to control the disease. The percentage of pullorum reactors permitted in a flock was reduced from 10 per cent in 1940 to less than five per cent in 1945. Today, Mississippi is designated as a Pullorum-Clean state. The disease has been eradicated from commercial poultry flocks in the state.

The US poultry industry grew significantly during the years of World War II. This growth, however, did not greatly impact the developing Mississippi poultry industry until the late 1940s and early 1950s.

During this period, more and more poultry companies began purchasing their own breeder flocks, hatcheries, feed mills, grow-out operations and processing plants. This type of operation was called a ‘vertically integrated operation’. The advantages of vertically integrated operations include reduced costs on volume purchases, formation of a single profit point (at the sale of the bird), implementation of the latest technical information available, better record keeping and improved processing and marketing procedures.

By the mid-1950s, integrated poultry companies began contracting with farmers to produce eggs and broilers. In general, the contract agreement required the company to provide chickens, feed and technical knowledge. The farmer provided the land, house, equipment and labour. The vast majority of Mississippi’s broilers and eggs are still produced under this type of contract arrangement.

The Extension Service and the Mississippi Poultry Improvement Association conducted numerous poultry barbecue demonstrations throughout the state to promote increased poultry consumption. Poultry companies hired men to work with the farmers with whom they had production contracts. These men were called ‘servicemen’. Mississippi State University conducted schools to teach the most current technology available. Approximately 150 to 300 poultry workers attended the two-day schools.

The industry matured during the 60s and early 70s. Several companies ceased to operate efficiently and were purchased by other companies. The industry consolidated into fewer, larger companies².

Poultry Integrators Operating in Mississippi

Koch Foods

Koch Foods began in the early 1970s. Its corporate office is located in Chicago. The company is owned by Joseph Grendys. In 2001, Koch Foods purchased B.C. Rogers, which was headquartered in Morton, Mississippi. Additional operations are located in Illinois, Ohio, Tennessee, Alabama and Georgia. Koch Foods has 2,700 employees and 650 growers in Mississippi.

Marshall Durbin Company

Marshall Durbin, Sr., began his business by selling fish and chicken in downtown Birmingham, Alabama. In 1930, he expanded into Mississippi when a bulk feed station was built in State Line. After the death of his father, Marshall Durbin, Jr., took over leadership of the company and in 1973 acquired four Mississippi poultry firms.

The poultry company became one of the first in the nation to establish a science and technology centre. Located in Jackson, the lab was dedicated to product safety and consumer health and was a significant investment for the company. In 1978, Marshall Durbin, Jr., was inducted into the Alabama Poultry Hall of Fame, and the company built a new feed mill, hatchery, and fleet garage in Philadelphia, Mississippi. Durbin completed a new laboratory in Jackson and finished remodelling a rendering plant in Hattiesburg in 1979. He was inducted in the Mississippi Poultry Hall of Fame in 1989. He died in 2001, and his daughters, Melissa and Elise Durbin, took control of the company.

Peco Foods, Inc.

John Herman Hickman started what is now Peco Foods in 1937, when he agreed to raise about 75 White Leghorn chicks for a family member in Gordo, Alabama. Soon, he was knocking on doors and selling chickens to homemakers for Sunday dinners. He obtained incubators and hatching machines, and in 1938, he began to vertically integrate his business.

In late 1989, the Hickman family expanded into Mississippi with the addition of the Bay Springs processing plant and feed mill. Today, Peco Foods, Inc., is the 10th-largest poultry company in the United States.

Sanderson Farms, Inc.

Sanderson Farms, Inc., a publicly held, vertically integrated poultry company, has more than $1 billion in sales and operations in Mississippi, Louisiana, Texas and Georgia. Sanderson Farms ranks among the top five poultry producers in the country, currently employing more than 8,800 people and contracting with more than 600 independent growers.

The company began as a farm supply business in 1947, selling seed, feed, fertiliser and other farm supplies. In 1951, D.R. Sanderson, Sr., D.R. Sanderson, Jr. and Joe Frank Sanderson organised a partnership named Sanderson Brothers. During the next few years, poultry production was added to the business. Then, in 1955, Sanderson Farms was incorporated, and the company began its growth into a top-quality chicken producer, which today is publicly traded on the NASDAQ exchange.

Tyson Foods, Inc.

Tyson Foods is owned and operated by the Tyson family. Although headquartered in Springdale, Arkansas, John Tyson began selling chickens outside Arkansas in the 1930s. By purchasing incubators and building feed mills, he moved toward vertical integration. From the 1930s until the 1990s, Tyson Foods continued to grow. In 1995, Tyson Foods purchased McCarty Farms, which was headquartered in Magee, and expanded the company with the addition of large processing facilities located in Forest and Carthage.

While it is still owned and operated by Don Tyson and his son John Tyson, Tyson Foods is a publicly traded company.

Wayne Farms, LLC

Wayne Farms is a division of ContiGroup Companies, founded in Belgium in 1813 and one of the largest privately held companies in the United States.

Wayne Farms, LLC, has been doing business since 1965, when it grew out of Allied Mills, a former subsidiary of Continental Grain Company. Wayne Farms began with locations in Albertville and Union Springs, Alabama. Over the course of the past 30 years, the company has acquired several processing facilities, including a new plant in Laurel. The original facility in Laurel was constructed in 1957 and later acquired by Wayne Farms.

The company now employs more than 1,000 workers in Laurel. Local employment spans across Clark, Covington, Forrest, Lamar, Jasper, Jones, Perry and Smith counties in Mississippi and Choctaw County in Alabama.

Wayne Farms is the fourth-largest vertically integrated poultry processor in the United States with annual sales exceeding $1 billion. Today, Wayne Farms employs 9,250 people in eight integrated complexes, including eight hatcheries, seven feed mills, eight slaughter-processing plants, and five further-processing plants.

Egg Production in Mississippi

The world’s largest company involved in producing, cleaning, grading, packaging and selling fresh shell eggs established its corporate headquarters in Hinds County, Mississippi, in 1963. At that time, the company employed about 200 people. Today, Cal-Maine Foods, Inc., employs more than 1,400 people and maintains facilities in 15 states.

Under the leadership of chairman and CEO Fred Adams, Jr., Cal-Maine has experienced steady growth and now markets 683 million dozen eggs per year. These eggs are produced by some 23 million laying hens. Most of the hens are Single Comb White Leghorns, the favourite breed for production of table eggs in the US.

Cal-Maine is a fully integrated producer and controls every aspect of production, processing, and distribution in its modern facilities, where the company carefully controls temperature, lighting, and humidity. At its in-line processing and distribution plants, Cal-Maine gathers, cleans, grades and packages the eggs mechanically, so no human hands touch them. On a normal day, the company processes about 216,750 dozen eggs each hour.

To ensure freshness and quality, Cal-Maine has a large fleet of trucks that deliver eggs to customers in 29 states in the Southeast, Southwest, Midwest and mid-Atlantic regions of the US Cal-Maine is a quality Mississippi-based corporation and it is determined to maintain its leadership position in the egg industry.

Mississippi Poultry Industry Size and National Rank

The poultry industry is the largest income-producing agricultural commodity in Mississippi. In 2010, the Mississippi poultry industry value of production exceeded $2.4 billion. The poultry industry is the top agricultural commodity in the state and has been for the past 16 years.

The majority of the Mississippi poultry industry’s income is generated by broilers (92 per cent), with commercial egg production (seven per cent) making up most of the remainder. Spent hens and non-commercial farm chickens produced about one per cent of the total poultry income. Mississippi ranked fourth in the nation in 2010 based on the number of broilers produced.

Typical farms now have four to six houses with 25,000 birds per house. Typically, one full-time worker can manage three houses. A flock of chickens reaches market size in about six weeks, depending on the target market. On average, a new broiler house is about 500 feet long by 44 feet wide and costs about $200,000 equipped. Broiler production is concentrated in central Mississippi. In 2010, more than 1,400 farmers in 36 counties contracted with broiler integrators. The exact number is hard to determine because some contract farmers own many houses and hire family members or other individuals to manage groups of houses. The following table shows numbers of broilers produced by county in Mississippi and the concentration of production within the state.

Most broilers produced in Mississippi are processed at one of the 19 in-state processing facilities. Most birds are not sold as whole birds; they are further processed. Fifteen of the processing facilities in Mississippi are capable of further processing. Further processing may mean the birds are cut up, deboned, formed, marinated, breaded, cooked, or specially packaged. Exact data on poultry processing sales, by plant, are not accessible because many companies are privately held businesses. However, according USDA 2010 annual estimated pounds slaughtered in Mississippi and the USDA 2010 average wholesale price per pound for processed chicken, the estimated sales for processing is approximately $2.8 billion. Table 6 lists all the processing plant locations and type of processing in Mississippi.

Economic Impact of the Mississippi Poultry Industry

The Mississippi poultry has a positive economic impact on many other businesses, both directly and indirectly. Many other industries benefit from the poultry industry in Mississippi. For example, small farmers who contract with integrators grow broilers in Mississippi. Corn and soybeans grown on Mississippi farms are major ingredients in broiler rations. Mississippi construction workers build broiler houses and processing plants. Mississippi facilities process broilers. Transportation companies ship poultry products both domestically and for export. Equipment manufacturers supply production and processing machinery, paper and plastic manufacturers supply packaging, and financial services help provide capital for investments and operating expenses.

The poultry industry has a significant direct impact in more than half of Mississippi’s counties. In 2009, integrated poultry firms in Mississippi employed more than 28,000 people in growing, processing, feed manufacturing and hatchery operations.

An input-output model is designed to show the financial links among the many participants in a regional economy. The IMPLAN System Version 3.0, created by the Minnesota IMPLAN Group, Inc., was used to evaluate the economic impacts of the poultry industry in Mississippi using data from 2009. The IMPLAN (IMpact analysis for PLANning) model was first developed by the USDA Forest Service to assist in land and resource management planning but today offers users more flexibility.

Changes in the economic activity of any one industry will result in changes throughout the whole economy. These ‘spill–over’ impacts should increase as economic interdependence increases. If an industry relies on local inputs and creates local jobs, then the spill–over impacts within the local economy should be relatively large. But if the industry relies on imported inputs, produces commodities that are exported, or is not very labour–intensive, then the spill–over impacts would be relatively small.

There are two types of spill–over impacts: indirect and induced. Indirect impacts reflect the many interindustry relationships involved in upstream production processes. Induced impacts are generated by the extra spending of households stemming from income generated through direct and indirect impacts on production.

A concept related to income is value added, which is defined as a firm’s revenue from selling its products minus the amount it paid for intermediate goods and services. For example, say a firm purchases a raw product for $7 from one ‘upstream’ firm and purchases inputs for $3 from other ‘upstream’ firms. It uses other factors of production, such as labour and capital, to transform the raw product into a finished product, and then sells the finished product for $15 to a ‘downstream’ buyer. The production activities of this firm resulted in a value added of $5, which is computed as $15 less $7 less $3. The firm will then use its value added ($5) to cover its expenses:

• payments to its factors of production (labour and capital),
• indirect business taxes, and
• profits.

If value added is computed for each firm in every stage in the supply chain, the total value added throughout the supply chain will be equal to the sales value of the final product. The economic impact of the poultry industry in Mississippi is presented in Table 7.

The Mississippi poultry industry directly employs an estimated 28,101 people to produce and process broilers and eggs. Wages and salaries paid to these employees totaled more than $1.19 billion. Spill–over, or the economic activity generated in other industries due to the indirect and induced economic effect, accounted for another estimated 26,963 jobs, with payrolls of $960 million.

The total direct, indirect and induced economic impact of the poultry industry in Mississippi is an estimated 55,065 jobs with $2.1 billion in income and $2.9 billion in value-added. (Value–added includes wages and salaries, indirect business taxes and profits).

Mississippi State Serves the Poultry Industry

• The Department of Poultry Science offers Bachelors and Masters of Science degrees in several areas of specialisation. The department also offers a PhD in agriculture with emphasis in poultry science. The department conducts research on issues faced by Mississippi growers and integrators. It regularly offers workshops to address specific problems affecting the industry and to keep poultry professionals current on the latest advances in poultry science.
  
  
• The USDA South Central Poultry Research Laboratory works closely with Mississippi State University and is providing extremely valuable information on management inside broiler houses to improve production. In addition, the laboratory is providing useful information on environmental influences on production and has a premier programme in Mycoplasma research that has the potential to save the poultry industry millions of dollars in losses related to this disease.
  
  
• The College of Veterinary Medicine conducts research on diseases affecting poultry flocks and provides assistance to poultry professionals when problems arise. They also conduct workshops to benefit the industry.
  
  
• The Department of Food Science, Nutrition, and Health Promotion conducts research to assist the processing sector. They also conduct workshops on food safety and regulatory compliance that benefit the industry.

References

(1) USDA, ERS, Trade and International Markets Overview 2011

(2) History of Mississippi Poultry Industry. Mississippi State University Extension Service.

Acknowledgements

The authors are grateful to Drs. Kim Morgan and John Michael Riley, Assistant Extension Professors, Department of Agricultural Economics, Mississippi State University, for technical review and comments.
Also, a special thanks to Stan Spurlock, PhD, Professor Emeritus, Department of Agricultural Economics, Mississippi State University, for his contribution to the study.