News and analysis on the global poultry
and animal feed industries.
on January 11, 2008

Justification for larger plant mechanization

Conversion developments together with closure of existing hen plants deprived farmers of available outlets.

The announcement that an obsolete broiler plant will be converted to process spent hens represents a welcome development for egg producers. On average egg producers have to dispose of approximately 5 million old hens each month to maintain the productivity of the national flock of 250 million hens.

During the 1950s through the 1970s dedicated plants to process hens were located within four hours driving time from the major centers of egg production. Campbell Soup Company was a leading processor and together with other enterprises plants were operational in California, Nebraska, Texas, South Carolina Maine, New Jersey and Georgia. With an escalation in labor costs, a trend to lighter hybrid hens and the need for larger plants to justify mechanization, hen processors were out priced by broiler integrators in the market for diced and deboned poultry meat destined for pies and soups.

Egg producers incur a cost of 8 to 10cents /dozen for pullet depreciation including the cost of depopulation. Humane killing usually involves on-farm exposure to carbon dioxide in carts or containers. Disposal is however a problem with rendering by a protein converter or on-farm composting as the major alternatives. Landfills, incinerators or burial are no longer practical or are disallowed by environmental regulations. Some Northern tier operations are able to market live hens across the border for processing in Canada. A few regional plants including one in Northern California continued through the last decade of the 1990s. This operation closed when quarantines imposed following the Newcastle disease outbreak in Southern California reduced their supply of live hens resulting in non-viability.

The City of Pine Bluff, Arkansas will be the location of a refurbished plant according to a mid December announcement by the Economic Development Alliance of Jefferson County. A new entity Pine Bluff Poultry LLC has received funding from Phuellink Investments LLC of Lodi, California. The 68,000 sq. ft. plant which will be refurbished at a cost of $3 million will be designed to process 60,000 hens per shift and will initially employ 150 workers from the local community. The plant was originally established in 1957 by Valmac Industries and processed 175,000 broilers/day when it was closed in 2004 by Tyson Foods in a consolidation and product rationalization program.

The conversion of a broiler plant to process hens is a reversal of an early 1990s modernization and refurbishing of a hen plant in Nebraska to produce branded specialty broilers. This development together with closure of existing hen plants deprived farmers of available outlets resulting ultimately in having to pay to deplete, transport and dispose of hens.

It is hoped that the Pine Bluffs plant is successful, although based on fixed costs and the labor complement, double shift operation will be necessary to attain long term profitability as a commercial non-subsidized enterprise. To maintain acceptable throughput the plant will probably have to process spent broiler breeders which are available across a three-state area. This will necessitate diligent scheduling to facilitate separate processing of 4 lb. egg type hens and 7 lb. breeders. Whatever the business plan including acquisition of hens and marketing of product, any development which brings employment to a depressed area and improves the income of poultry farmers is welcome.

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