Times were good for top broiler companies in the U.S. in 2017. Driven by favorable market conditions, 28 of the 32 companies included in WATT Global Media’s annual Top Broiler Companies survey either increased production or maintained the same level of production as the previous year.
With this positive momentum, many in the industry committed to expansion in 2017 and beyond. According to survey responses and industry research, 14 of the 32 companies made a significant investment – in the form of new construction, acquisition or significant upgrades – in 2017 or announced plans for new investments in 2018 or later.
One leading figure in the industry, Joe Sanderson Jr., CEO of third-ranked Sanderson Farms Inc., closed 2017 with the prediction that the amount of broiler meat produced in the U.S. will grow by 9.7 percent by 2021 due to current market conditions and ongoing industry expansion.
Industry performance at a glance
In total, the 32 top broiler companies produced 898.87 million pounds of ready-to-cook chicken (RTC) on a weekly basis in 2017, 36.03 million pounds – or about 4 percent – more than the 862.84 million pounds produced on a weekly basis in 2016.
Nineteen of the 32 companies saw production rise year-over-year while nine experienced no change. Comparatively, only four companies decreased output during the year. The decrease was relatively slight as well. As a whole, those four companies accounted for a decline of only 1.36 million pounds RTC on a weekly basis.
Top producers invest in expansion
The five largest chicken companies in the U.S. – Tyson Foods Inc., Pilgrim’s, Sanderson Farms, Perdue Foods and Koch Foods Inc. – retained their leading position in 2017. With the exception of Koch, all increased year-over-year production. With the wind at their backs, four of these companies committed to major investments in 2017 to grow production in the future.
Tyson Foods, the top chicken company, produced 174.80 million pounds of ready-to-cook chicken on a weekly basis in 2017, an increase of 510,000 pounds – or about .29 percent – from 2016.
Tyson launched two major expansion projects in 2017, both in the Volunteer State. In August 2017, it announced the $84 million expansion of its Union City, Tennessee, poultry plant. The expansion is expected to add more than 300 jobs and require the addition of 200 more broiler chicken houses. It should be completed in 2019.
In November 2017, the company announced it would place a $300 million chicken production complex in Humboldt, Tennessee. The new plant will produce pre-packaged trays of fresh chicken for retail grocery stores nationwide and is expected to process 1.25 million birds per week, increasing overall production capacity by the same amount. The project is expected to create more than 1,500 jobs.
Tyson also grew through acquisition, adding Cincinnati-based AdvancePierre Foods Holdings Inc. in a $4.2 billion deal in June 2017 and Philadelphia-based Original Philly Holdings Inc. in November 2017.
Pilgrim’s, the second-largest company, produced 154.2 million pounds of ready-to-cook chicken on a weekly basis in 2017, an increase of 12 million pounds – or about 8.4 percent – from 2016.
Pilgrim's did not announce any major capital improvements in 2017, but it was involved in a pair of key acquisitions. The company officially added GNP Co. – the 19th largest chicken company in the previous year's rankings – in a $350 million acquisition that closed in January 2017. GNP’s performance is now included in Pilgrim’s data.
In September 2017, Pilgrim’s announced the acquisition of Moy Park, a leading poultry and prepared foods supplier with operations in the United Kingdom and Europe, from JBS S.A., in a $1.3 billion transaction. Brazilian protein company JBS controls 78.5 percent of Pilgrim’s stock. Moy Park is not included in the 2017 data.
Sanderson Farms, the third-largest company, produced 82.5 million pounds of ready-to-cook chicken on a weekly basis in 2017, an increase of 10.1 million pounds – or about 14 percent – from 2016.
In January 2017, Sanderson began operations at its new St. Pauls, North Carolina, facility. The complex includes a new hatchery, processing plant, wastewater facility and the expansion of an existing feed mill in Kinston, North Carolina. The upgrades cost about $161 million. In 2018, the company will continue the construction of a new complex near Tyler, Texas. The $200 million project will include a new feed mill, hatchery, poultry processing plant and waste water treatment facility. Operations are expected to begin in 2019.
Fifth-ranked Koch Foods produced 50 million pounds of ready-to-cook chicken on a weekly basis in 2017, the same amount as 2016.
In October 2017, Koch announced a pair of expansion plans for its operations in Alabama. It plans on building a $40.5 million feed mill in Roanoke, Alabama, that should support its poultry plant in Pine Mountain, Georgia, as well as 190 new growing houses run by local contract farmers. Koch also plans to expand its hatchery in Crossville, Alabama, to increase production to 3.8 million eggs per week from its current weekly capacity of 2.1 million eggs. The hatchery expansion is expected to be completed by June 2018.
Other producers betting on the future
Twelve other companies made investments, whether it be acquisition, new construction or upgrades, in 2017:
Wayne Farms: Opened a new, $55 million feed mill facility in Dale County, Alabama, in January 2017. In May 2017, it broke ground on a new, $4.5 million facility in Decatur, Alabama, it calls its future Customer Innovation Center. The new facility is expected to open in early 2018 and serve as its center of research, development and product testing.
Mountaire Farms: In 2017, the company made several improvements including: the purchase and planned renovation of a plant in Siler City, North Carolina, and the purchase of two grain elevators in Virginia. In 2018, the company plans to build a new, $44 million feed mill in Scotland County, North Carolina.
Peco Foods: In 2018, it plans to purchase an existing cold storage distribution facility including renovations and adding additional onsite square footage for partially cooked production lines.
George’s Inc.: In November 2017, it acquired Campos Foods LLC from Oklahoma City-based Lopez Foods. Campos Foods produces fully cooked pork, beef and turkey products to service retail, foodservice and convenience store channels.
Foster Farms: In August 2017, the company announced a $30 million expansion and upgrade of its processing plant in Farmerville, Louisiana. New equipment was expected to be installed by October 2017.
Mar-Jac Poultry Inc.: In July 2017, the company announced plans to build a new, $35 million feed mill and $23 million hatchery in Franklin County, Alabama.
OK Foods Inc.: In July 2017, Industrias Bachoco – the parent company of OK Foods – announced the acquisition of Alabama-based value-added and further processed product maker Albertville Quality Foods through OK Foods.
Simmons Foods: In September 2017, it announced plans to build a new chicken facility in Benton County, Arkansas. The planned $300 million plant will produce fresh and frozen chicken products for retail and restaurant customers and process as much as 850 million pounds of poultry meat annually. It could open in 2019.
Allen Harim Foods: In October 2017, Allen Harim broke ground on a new, $22 million hatchery in Dagsboro, Delaware, with a planned capacity of 2.5 million eggs per week.
Harrison Poultry Inc.: The company completed numerous improvement in 2017 including: a $750,000 automated thigh deboning upgrade; installation of new chillers; an upgraded ammonia system, $4 million worth of new re-chillers; $500,000 worth of LAS system expansion; and the completion of a $3 million live receiving drawer system. In 2018, it plans on adding: a new, $45 million feed mill; $3 million expansion of blast freezing capacity and spending $3 million on automated breast deboning.
Farmers Pride Inc.: In November 2017, it broke ground on a new processing plant in Pennsylvania. It should be operating in 2020 and processing 2.6 million birds per week at full capacity.
Miller Poultry: In 2017, it installed a $1.5 million gas stunning system for better animal welfare.
Read more: WATT PoultryUSA March 2018.
Learn more about the top U.S. broiler producers:
