March 23, 2021

Value of Delmarva, US poultry industry dropped 5% in 2020



The poultry industry in Delmarva, a large peninsula on the East Coast of the United States, has seen its value fell 5% last year.


The drop shows the high demand of consumers stocking up on frozen chicken as a counterweight against labor shortages and limited markets outside grocery stores early in the COVID-19 pandemic.


The Delmarva Chicken Association (DCA) recently released its year-end report that estimates a US$3.4 billion industry profit from wholesale chicken sales in 2020. Farmers raised 570 million chickens — another 5% drop from 2019 — and processors produced 4.2 billion pounds of shelf- and table-ready chicken, slightly down from the previous year.


The poultry industry dropped to 17,955 employees earning US$741 million in combined wages, a 5% decrease from 2019. But seeing this as a hiccup in a decade of otherwise positive trends, DCA executive director Holly Porter remains optimistic that this year will recover from the pandemic's disruption.


"We do anticipate more positive year-to-year trends for 2021 as the COVID-19 vaccine allows consumers to get back to normal in many respects and the markets recover," Porter told the Delaware Business Times in an email. "Our hope is that the single-digit drops in metrics become positive numbers when we report figures for 2021, because it would mean the industry is back on a familiar track of moderate, sustainable growth, adding jobs and remaining a crucial piece of Delmarva's economy."


The DCA attributes its struggles to COVID-19-related shutdowns.


Last April, Delaware Governor John Carney declared Sussex County and its poultry processing plants a coronavirus hotspot and debated closing them down as employees work and often live in close quarters. As plants for companies like Mountaire, Perdue and Allan Harim adapted to minimise risk and accommodate employees' need for quarantine, it limited the amount of chicken processed, packaged and shipped.


COVID-19-spurred restrictions on restaurants, conference centers and schools in the region also essentially shut down half of the poultry industry's consumer market.


All of this had a cascading effect on the poultry industry. With plants taking in fewer birds, farmers were forced to hold onto their flocks longer, cutting into their income. In late April, farmers across the US were forced to slaughter two million birds without an end market for them to sell to.


These delays also have the potential to make small waves in supporting services, as poultry companies bought 90 million bushels of corn, 36 million bushels of soybeans, and 403,000 bushels of wheat from local grain farmers for chicken feed last year. The industry spent US$1 billion on chicken feed in 2020, a fraction of a percent less than 2019.


The pool of chicken farmers continues to get smaller, as the DCA report shows that there were 1,278 chicken growers in 2020. That's half the amount that existed 20 years ago.


DCA spokesman James Fisher pointed out that rapid residential housing growth in rural areas is increasing land values while rezoning land makes it harder for farmers to start a chicken farm or expand one.


"In Kent and Sussex counties, the human population growth is outpaced production growth in the chicken industry, according to the US Census," he said.


Fisher added that chicken growers are operating more efficiently, and animal welfare programmes have brought "slow but sustained" increases in bird size, which in turn creates long-term growth in pounds of meat produced. Chicken houses have the capacity of 149 million chickens.


"Processors will continue to work closely with Delmarva growers for supply, because it's not economical to source from other areas," Fisher said.


- Delaware Business Times

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