Study shows ‘chicken industry is a competitive and thriving sector’
By Stewart Doan
© Copyright Agri-Pulse Communications, Inc.
“On the national scale, it is the overall conclusion of this study that the chicken industry is a competitive and thriving sector,” wrote ag economist Dr. Thomas Elam, president of FarmEcon LLC. “Intense competition among chicken companies leads to product innovation and lower prices for consumers.
Production and consumption of chicken has grown almost every year since the 1960s.
vertically integrated system, in which a single company owns or controls
virtually all phases of the operation, also benefits the independent family
farmers who raise chickens under contracts with the companies, asserted
“Contract growers are insulated from integrator margin risk by fixed price contract terms. They receive payments that are not tied to market variations in prices of chicken and feed,” the study said. “These risks are largely shifted to the integrator, who absorbs the financial losses from adverse weather, general disease outbreaks, feed quality, and other factors potentially adversely affecting live chicken performance.”
whether contract growers are satisfied with vertical integration,
The study concludes that the broad powers granted USDA’s Grain Inspection Packers and Stockyards Administration (GIPSA) to regulate poultry contracts should be sufficient to remedy legitimate issues for either growers or integrators.
if GIPSA regulations were to become excessive and burdensome,
The study is available online at www.nationalchickencouncil.com
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