There could be a direct relation between the increased supply of chicken leg quarters in the United States and the August raids by U.S. Immigration and Customs Enforcement agents (ICE) at a handful of Mississippi poultry plants, the CEO of Sanderson Farms said.
The raids were conducted on August 7 at seven plants in Mississippi, including three Peco Foods facilities and one Koch Foods facility. While Sanderson Farms in headquartered in Mississippi and has plants in the state, no Sanderson Farms facilities were targeted in the raids.
While participating in a quarterly earnings call on August 29, one analyst asked about a softening of prices for dark meat chicken.
In response to the question, Lampkin Butts, president a chief operating officer of Sanderson Farms, said the company is seeing “more leg quarter products out there,” adding, “There’s some plants that are struggling to debone.”
Joe F. Sanderson Jr., chairman and CEO of Sanderson Farms, elaborated on why he believes some plants are struggling with their deboning operations.
“It began with the raids in Mississippi, and then it spread into Alabama and Georgia,” said Sanderson. “People were not coming to work because they were fearing ICE raids, so there’s less deboning of dark meat and more production of leg quarters, and that is why we think the export market softened a couple of months earlier than normal.”
More automation
Another analyst addressed the ICE situation, along with the overall shortage of available workers for the industry. He asked if increased automation would help alleviate the situation.
Sanderson pointed out Sanderson Farms has allocated about $70 million in capital expenditures, and that capital is being applied toward automation of big bird deboning plants and tray pack plants.
However, he said the reasoning for those expenditures was external to the ICE raids.
“It didn’t have anything to do with ICE raids. It was just labor-saving devices and increasing our capacity for dark meat deboning,” he said.
