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Poultry, livestock producers face economic challenges from coronavirus

The LSU AgCenter and the Louisiana Farm Bureau Federation have drafted a request for federal aid for poultry producers, who are not included in the most recent farm aid package — but the request has been turned down.
Poultry is the largest agricultural enterprise in Louisiana. LSU AgCenter livestock specialist Jason Holmes said poultry is a major component of the north Louisiana economy.
Holmes and AgCenter economist Kurt Guidry drafted the funding request letter.
In 2019, 251 Louisiana growers produced more than 1 billion pounds of broiler meat with a gross farm value of $923.8 million, according to AgCenter statistics. But Holmes said the overall commercial poultry industry faces uncertainty created by a bottleneck at processing plants.
“It’s a perfect storm for the meat industry,” Holmes said.
The request said producers face an uncertain, difficult future.
“The next few weeks could be an unparalleled challenge for all segments of meat protein production,” the request said. “We beg you take these words into consideration and help us keep a very vital part of state’s agricultural, and the state’s economy overall, intact.”
But the aid request has been rejected, according to Butch Oakes, a poultry producer in Ouachita Parish and chairman of the Louisiana Farm Bureau Federation’s Poultry Committee.
“We were told we wouldn’t get it, point blank,” Oakes said on April 23.
He said federal agriculture authorities believe the poultry companies can withstand the economic difficulties caused by the pandemic, but Oakes said poultry producers are contract entities.
“We are tenant farmers on our own land,” he said.
Poultry producers receive young birds from companies, then house and feed the birds until they reach market size in about six weeks. But several problems have interrupted that chain, and growers stand to lose about 25% to 40% of their income if that continues, Holmes said.
Oakes is one of about 100 growers raising chickens for the Foster Farms poultry plant near Farmerville. Many of the workers at the processing plant have walked off the job citing an unsafe work environment with the pandemic, Oakes said.
In addition, prison labor was used for some of the work, and authorities have stopped the work-release program because of the possibility that inmates could return to the prison and spread the virus.
In March, two workers at the Farmerville plant were diagnosed with the coronavirus. The company says it has operated safely and has taken additional precautions because of the virus.
The company’s website states: “Foster Farms has stringent production practices in place that include rigorous sanitation. Our plants are continuously sanitized and approved by the United States Department of Agriculture (USDA) before beginning operations each day. We have added to these practices by increasing daily sanitation and personal hygiene checks throughout our facilities, and organizing workflow to enhance social distancing. We will continue to monitor guidance from CDC and USDA, and are prepared to respond quickly.”
The company says it conducts daily sanitation and personal hygiene checks; has increased handwashing and sanitizer stations; has restricted travel; and screens all visitors. The company also says it conducts daily wellness checks and provides protective clothing.
Oakes said another processing plant in Louisiana, Raeford Farms near Arcadia, has curtailed its operations because much of its business depended on restaurant company orders. The company has started selling directly to the public, advertising on the company’s Facebook page.
Pilgrim’s Pride near Natchitoches, which processes birds for retail sales, is operating at slightly lower-than-normal production, Holmes said.
Oakes has six chicken houses, all full of birds three weeks old.
“In six weeks, I produce 500 three-piece chicken dinners,” he said.
It’s possible that a grower’s entire flock would have to be destroyed if a processing facility is shut down or doesn’t have the capacity, Oakes said.
The beef industry also is facing a similar problem at processing plants because workers have become sick, Holmes said.
“Feed yards are getting full, and live weights are getting bigger,” Holmes said, adding that higher-quality cuts of meat are difficult to move.
Oakes also has beef calves that need to be weaned so their mothers can be bred for another calf crop.
“If I take them off their mommas, I’ve got to feed them,” he said.
Holmes said the pork industry, while not a major commodity in Louisiana, faces the same problems.
AgCenter regional beef cattle specialist Vince Deshotel said many cattle producers have cattle ready to sell.
“People are just hesitant to send anything to a sale because there’s no market,” he said.
Many of the buyers are from Texas, and they have had difficulties getting back to their home state because of travel restrictions imposed by Texas on travelers from Louisiana, Deshotel said.
Some cattle owners have been able to create niche markets by selling calves to individuals, he said.
Oakes also has timber, but the market is flat.
“You can’t give timber away,” he said.
Oakes said he knows a farmer who grows cabbage that needs to be harvested and has tried to sell his crop for 25 cents a head.
“He’s literally Bushhogging the cabbage down,” he said.
As bad as things are, Oakes hasn’t heard of anyone getting out of poultry — probably because most producers are carrying substantial debt, he said.
A new chicken house costs $500,000. Lenders are willing to restructure loans, but that usually means a borrower ends up paying more in interest, he said.
Oakes said Foster Farms provides chicks on a regular schedule, and chicken houses are empty for about seven to 14 days between flocks. But with the problems at the processing plant, that downtime may be as long as 28 to 35 days.
Oakes said his current is three weeks old. “I sweated bullets not knowing if I was going to get birds,” he said. “Everybody is on pins and needles.”

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