America’s Chicken Broiler Industry
How the Literature Leads Farmers to Dream Big Just to Fall Short
Between the 1940s and the 1960s chicken consumption spiked. By 1985 it had passed pork and by 1992 it passed beef as the most consumed meat in the United States. Today, Americans eat more chicken than anyone else in the world--boasting an incredible 90 pounds per person a year. According to the National Chicken Council, America’s favorite meat is a $90 billion a year industry, however, contract chicken broilers are riding the poverty line and struggling to make ends meet.
Broilers are chickens raised with the express purpose of being consumed for meat. With the boom that occurred in chicken consumption in the 1950s, big chicken companies like Purdue and Tyson were forced to outsource their broiler production to independent farmers. According to the National Chicken Council, the contract broiler relationship was a response to the high cost of market entry (paying for chickens and feed) for the small time farmer. But since the inception of this relationship, the chicken companies have gotten exponentially bigger while the independent farmer has been left in the dust.
The dynamic that has become the modern industrial poultry process is this: chicken companies like Perdue provide the chickens and the feed while the farmer is responsible for raising the chickens, building the grow houses, maintaining the ever-changing standards for grow houses mandated by chicken manufactures, and waste management. To quote John Oliver’s quip about the relationship, “So basically, [the chicken companies] own everything that makes money, and [the farmers] own everything that costs money.” Many farmers, despite the USDA’s most recent stats, live rather close to the poverty line and are forced to work on tight margins. Although these huge companies eliminated the cost of chickens and feed, it still costs about $1 million just to build enough houses to maintain a viable farm for a company like Perdue. This does not necessarily include all of the equipment that is necessary and these costs will only continue to rise as companies continue to change their standards for grow houses without any financial assistance to the farmers.
This essay aims to highlight the inequitable nature of the farmer-company relationship and particularly how companies like Perdue are using disinformation to lure a vulnerable audience to enter the industry.
The first document I will be analyzing is an informational brochure from Perdue entitled “Homegrown Success: Opportunities for Independent Contract Producers.” This is an informational brochure meant for farmers who are interested in raising chickens or turkeys for Perdue. My analysis of this document will be into whether or not Perdue is being entirely straightforward about the risk and potential income. The farmers that are leading the charge against these big companies are often citing that they felt cheated and “lied to.” So, when looking at this document I will be looking to see if anything is potentially deceiving.
The second piece I will be analyzing is an online promotional video released by Perdue Farms entitled “Jim Perdue. Chairman, Perdue Farms.” While this is not an advertisement in the conventional sense, it boils down to Jim Perdue talking about his business’ ethics. I’m analyzing this document because I think it will provide more insight into the narrative that Perdue is trying to present to its customers and potential contract broiler producers.
In the same vein as the Perdue video, I’ll be taking a look at a promotional video by Tyson entitled “Tyson Poultry Farmers.” Unlike Perdue’s seemingly “natural” video, this promo is much more self-aware. The video is straightforward and constructed more like an ad. Although this video is beautifully produced, my analysis aims to deconstruct the video and look behind the smiles to find out what’s really being said (or in some cases, omitted).
Lastly, I’ll be taking a look at a recent article published by the USDA entitled “Financial Risks and Incomes in Contract Broiler Production.” This article is supposedly maintaining a neutral stance on the industry and supposed to clearly represent the facts. My goal is to analyze this article to ensure that the information represented here isn’t just as deceptive as the information presented by the big chicken companies. If there is misleading information, I will outline my hypothesis as to why that is.
Perdue’s brochure “Homegrown Success: Opportunities for Independent Contract Producers” is expertly crafted for a target audience of farmers looking to get into the broiler industry. As to be expected of a promotional material, the rhetoric is persuasive and makes the reader feel comfortable. According to verdantlabs.com nearly 75% of farmers are republicans and Perdue makes use of this truth, targeting their audience of primarily white, middle-aged, conservative men. Carrying with it a familial theme, the document intends to evoke a strong sense of pathos in the intended reader--a goal it successfully achieves. The brochure begins with a welcome page that describes the company’s family history as well as its commitment to integrity and honesty. From there the document moves into the “Why Grow For Perdue” section.
Perdue doesn’t skip a rhetorical beat here, starting things off with a bit about its family origins. This section primarily serves to establish credibility with the reader and instill some sort of confidence that Perdue is the best company to contract farm for. After reading closely and taking a step back, however, I came to realize that this section is massively underinforming. Rather than present any concrete facts or quantitative substantiation, the section boils down to “farm with us, we’re good people.” One thing that catches the eye in this section, however, is the Perdue contract grower quote in elegant blue font that reads “Of all the business ventures I could get into, Perdue was the most appealing -- especially for the profit margins.” This quote is credited to former CPA Charles Booth of the Pickin’ and Scratchin’ Farm. After reading this quote and the short bio of the speaker, the prospective farmer may feel more confident that this will be a lucrative venture for them even though the actual figures are not presented.
In the next section, “A Growing Relationship,” Perdue outlines both the history and the basic structure for the company-farmer relationship. Perdue describes the relationship at a basic level saying: “the producer is responsible for building and maintaining the poultry house according to Perdue’s standards, and for caring for our birds according to Perdue’s grow-out programs, best management practices, biosecurity requirements and poultry welfare guidelines. Perdue provides specially formulated feeds, any necessary medications and expert guidance.” The fact that the basic structure of the company-farmer relationship is just now surfacing on page five is curious, however, this section begins to doll out pertinent information. This section does, however, leave some issues out and I will discuss these further later in this essay.
Perdue then discusses its system of compensation. “The contracts are competitive, and are designed to reward producers for above-average performance.” There is no other mention of this “reward system” for the rest of the article. What Perdue is referring to here is their “tournament-style” rewards system. According to an NPR article entitled, “The System of Supplying America’s Chicken Pits Farmer vs Farmer,” “the farmers are ranked, like teams competing in a sports league. The top-ranked farmer can get paid up to 50 percent more, per pound of chicken delivered, than the one at the bottom.” While the system has technically been addressed, there is no other mention of it in the article. I will discuss the implications of this system in the latter portion of this essay.
The most information-laden section (and therefore the most useful one) of this brochure is the FAQ section. One question in this section reads, “What are my obligations?” The response to the question, in short, is “Your specific obligations are defined in the contract and your Perdue representative can provide you with a sample copy for your growing program.” This is the most important question to a prospective investor and its answer merely moves the investor along with no real information. The rhetoric employed here can be likened to “beating around the bush.” The basic marketing concept of conversion aims to get the customer to commit to the next step of the purchase process. Perdue employs this method, hoping to have a greater chance of acquiring them as a contract farmer.
While the rhetoric of Perdue’s Brochure has a questionable level of transparency, it’s Jim Perdue’s biggest selling point in the online promotional video “Jim Perdue. Chairman, Perdue Farms.” This video’s target audience is not farmers, but rather their buying customers. In this video, Perdue hopes to assure their customers that they are an ethical organization that “treats their people right.” The biggest takeaway from this relatively short clip was Jim Perdue’s assertion that “no matter what the regulations are that come out, it won’t make any difference. Because we are doing the right thing and we’re transparent.” The video is well-produced with upbeat music to accompany. The method of delivery--a YouTube video--makes for a casual method of delivery and easy information reception. This video is likely to be seen by customers looking to do more research into the practices of their chicken supplier and if they simply watched this video they would certainly feel more at ease knowing that Perdue is “doing the right thing.”
The desire to promote transparency is also apparent in Tyson’s promotional video simply titled, “Tyson Poultry Farmers.” In this video, several farmers and one corporate production manager glorify the company and the chicken industry as a whole. The rhetorical strategy that is present here is commendable. With the aid of beautiful video production, smiling faces, and the ubiquitous references to family, Tyson is able to praise the position of the contract farmer while still presenting the reality of the business.
An important thing to note is how Tyson situates its message in the video. What could be construed as a one-sided beneficiary relationship is spun in the context of this video. By placing the details of the company-farmer relationship just prior to Megan Farris’ bit about taking pride in one’s work, Tyson achieves a rhetorical framing that makes the relationship seem more fair and beneficial to the farmer than it really is.
In 2014, James M. MacDonald of the USDA released an article called “Financial Risks and Incomes in Broiler Production.” The data, represented in navigable charts and graphs. To his credit, MacDonald makes a concerted effort to explain that the data in the article may be misleading.
The stats represented here are not telling the whole story. The graph above is representative of household income, not the income of farmers who rely solely on chickens. The USDA says the we can assume that half of this income comes from off-farm income, however, it lacks an explanation of where that figure came from. According to the PEW Charitable Trust’s document “The Business of Broilers: The Cost of Putting a Chicken on Every Grill”, as much as 80% of a broiler chicken producer’s income may have to come from off-farm sources. The USDA’s figure has no footing. A 2001 study by the National Contract Poultry Growers Association and the USDA found that farmers who rely on broiler production as their sole source of income actually live below the poverty line.
All of the promotional materials we’ve looked omit many of the harsh realities of contract chicken farming. This omission by both Perdue and Tyson, masked by false hope-inspiring rhetoric and expertly crafted video production, amounts to disinformation. After reading Perdue’s quote from CPA Charles Booth, the farmer anticipates a lucrative business relationship. However, the brochure fails to mention that profit margins for farmers in the industry are actually quite thin--at least for the first 15 years or so. It costs about $1 million to build four chicken houses to the standards that Perdue requires, according to Richard Lobb of the National Chicken Council. To come up with this capital, most farmers that build these houses do so with help of a 15-20 year amortization loan as the PEW Charitable Trust states. Not only will farmers often find themselves in debt, but they will find themselves in years and years of debt.
A similar method of disinformation surrounds Perdue’s “tournament-style” rewards system. While it is mentioned briefly, the implications of the system are not discussed. Farmers that are struggling to make ends meet will often be forced to turn to off-farm jobs to supplement their income. This time spent working off-farm means less time spent caring for the chickens which can, in turn, contribute to an underperforming farm. Farmers may find themselves stuck in this cycle of lower pay as they hustle to make payments on their 15 year chicken house mortgages.
Jim Perdue’s biggest selling point is that his company is up-to-date on regulations and transparent, however, Perdue writes that farmers “need to budget for the cost of upgrades, some of which may be required by Perdue to keep [their] operation competitive.” So, really the weight of keeping up to code does not necessarily fall on the shoulders of Perdue, rather, the responsibility and costs go to the contract farmer. And to add perspective, 99% of all broilers are produced by contract farmers, according to Dan Cunningham’s article “Contract Broiler Production: Questions and Answers.”
To better comment on Perdue’s transparency, I reached out to several state and regional Perdue representatives for information. In my email I posed as a farmer searching for more information on the broiler production process. The body of my email reads: “I’m interested in the role of the broiler and more specifically what their obligations are. Is there any way I could look at a sample contract to better decide whether or not I want to get involved? Could you point me in the right direction?” I have yet to receive a response to any of the several emails I have sent.
While there are plenty of broilers who are financially stable, there are many who are not. And the number of farmers drowning in mortgage debt is set to increase. Since 2008, chicken production has plateaued (see graph below). In his article, James M. MacDonald goes on to say that “with flat or declining production, more growers face a risk of contract non-renewal or getting fewer chicks placed.” Underperforming farms, caught in a cycle of financial punishment as per Perdue’s “tournament-style” rewards system, will likely be out of a job. Many of those farmers who are already struggling to make payments on mortgages face the possibility of losing their farm.
Until fairly recently, farmers were afraid to speak out against their corporate partners. However, the lifting of the GIPSA rider from the Farming Appropriations Bill represented a landmark moment in contract farmers’ rights. This rider stipulated that it was not illegal for chicken production corporations like Perdue or Tyson to sue farmers who spoke out about contractual conditions that they deemed unfair. For many years, big chicken companies had been attacking farmers that spoke out about these conditions. Citizens must back independent farmers who are fighting this uphill battle. Chicken production corporations have money to lobby with Congress and that money will continue to dominate until the public has taken notice. With the vocal support and acknowledgement of citizens like you and I, farmers may be able to change the nature of the business relationship in a way that will benefit the farmer. Because as it stands, the farmer is merely utilized to facilitate higher profits by the corporations that dominate the chicken broiler industry.