As chicken producer 'depopulates,' other companies forced to adapt to shifting demand
Delaware’s top agricultural industry is facing labor and demand challenges as a result of the coronavirus outbreak.
One poultry company appears to have made a tough decision.
Millsboro-based chicken producer Allen Harim has experienced a significant reduction in workforce at its processing plants, and therefore needs to “depopulate” its flocks— or kill chickens without sending them to be processed for food— according to what appears to be a letter to growers circulated on social media last week.
The letter dated April 8 and apparently signed by Michele Minton, director of live operations at Allen Harim, indicates the company planned to begin depopulating flocks starting April 10. It says contracted growers chosen for depopulation will be “fairly compensated.”
The letter states that over the previous two weeks, the company’s plant attendance had declined to 50 percent of “normal operation,” hampering the company’s ability to “harvest” the amount of birds needed to maintain targets on chicken weights and ages.
“When we started noticing the downward trend in attendance, we reduced the number of egg set and chicks placed,” the letter continues. “Unfortunately, reduced placements will not make an impact for another six weeks and with the continued attendance decline, and building bird inventory daily, we are forced to make a very difficult decision.”
Allen Harim did not respond to multiple requests for comment, but the trade group Delmarva Poultry Industry Inc. confirmed “a company” plans to depopulate close to 2 million birds.
Holly Porter, executive director of Delmarva Poultry Industry, Inc., estimates the labor shortage could be due to a combination of illness, self-quarantining or child care issues — and is hitting multiple companies.
“Across the board, across Delmarva, our processing plants have seen a reduction in workforce,” she said. “And that has caused a company to make a decision, a very tough, last-resort decision, to depopulate due to not being able to run the processing facility at the capacity that they need.”
“They will be compensating the growers,” Porter added. “How that compensation works will really be between the company and the contract growers that they work with.”
Perdue Farms says the coronavirus has not changed its staffing needs at its Delaware processing plants. The company closed its facility in Milford for one day late last month for cleaning after two workers tested positive for the virus. Spokesperson Diana Souder says the company has implemented several measures to protect its workers, including temperature checks, face masks and temporary partitions between production workers where social distancing “isn’t possible.”
Souder says Perdue has not directed growers to depopulate.
Cathy Bassett, a spokesperson for Millsboro-based Mountaire Farms, says her company has experienced some “slight” decreases in labor due to the virus — but has not directed growers to depopulate either. She emphasized the company has taken steps to protect workers in the plants and help them socially distance during breaks. She adds the company has also relaxed attendance policies, given hourly workers a sick leave policy and increased pay.
A Facebook post by Allen Harim on April 9 stated that the company was putting into place protective measures, including face masks and temperature checks, at production and non-production facilities. The post said the company has also relaxed its attendance policies.
“Our top priority is keeping all of our team members safe and healthy!” the post read.
How flocks are depopulated
Georgie Cartanza is a chicken grower for a different company and an agent with the University of Delaware’s cooperative extension. She says depopulation is usually used to contain outbreaks of avian flu among flocks, but this is the first time in her career she’s seen it used because of a production bottleneck.
“This would be the very last thing that you would ever want to have to do,” she said. “I can assure you, from an integrator’s standpoint, from a grower’s standpoint, all parties involved— this just would be almost unfathomable. But who would have foreseen that we would have COVID-19, right?”
Cartanza says if chickens are allowed to continue to grow inside a chicken house without being harvested, the house can become overcrowded, which is a stressor for the birds. The recommended method for depopulating the flocks is closing off the ventilation in the chicken house, Cartanza says, which causes the birds to die from hyperthermia. Cartanza says this method is more efficient and less labor-intensive than other available methods, and is therefore most appropriate during the COVID-19 outbreak.
“It’s as humane as it can possibly be in the circumstances,” said Cartanza.
The fact that the rest of the industry is also being squeezed by the coronavirus leaves the integrator with fewer alternatives to depopulating, says Cartanza.
“Let’s say one processing plant on Delmarva had a fire and maybe they had to be down for a couple days,” said Cartanza. “The other integrators would work together to get those birds processed. But all of them are challenged with getting their plants fully staffed right now. Some companies had more ... flexibility in shipping product from one place to another.”
Porter echoes this sentiment.
“[Depopulating] is the absolute last thing that anybody wants to do or go through no matter what the situation is,” she said. “So all avenues have been considered. There were discussions about moving birds and having them harvested at other plants. This isn’t a decision that’s made lightly and all possible avenues are always researched at the point of having to make this decision.”
A shift in demand
Poultry producers are also being hit with shifts in demand due to restrictions on restaurants and institutions during the coronavirus outbreak.
Cartanza says in the poultry processing industry, roughly half of the product goes to grocery stores, and the other half goes to restaurants, food service, institutions and schools. Equipment in a processing plant is specialized to package product differently for different destinations.
“Fifty percent, just using that as a number, of what you’re processing is being packaged and distributed to the food service sector,” said Delaware Farm Bureau president Richard Wilkins. “Then all of a sudden that demand goes away— very quickly you have an oversupply of product that’s been packaged in a way that the food service industry had said that they want it, and at the same time a shortage of product that’s packaged in the manner, shape and form that the household consumer says that they want.”
“Personally,” Wilkins added, “I’m a bit frustrated that the industry was not nimble enough to make the adaptations quick enough to avoid this near catastrophe.”
Holly Porter of Delmarva Poultry Industry, Inc. says the pace of the changes brought on by COVID-19 makes this difficult.
“Oftentimes the market shifts are over a matter of years,” she said. “This was over a matter of days. It definitely has made it difficult, but not impossible by any means. I know that all of our companies have stepped up, have done what they can in making sure they can get the supplies to make that shift. ... We are part of maintaining the food supply, making sure grocery stores have chicken on the shelves.”
According to Allen Harim’s Facebook page, the company has held truckload sales at several fire companies in Delaware, selling the 40-lb cases which would usually be shipped to institutional settings.
Cathy Bassett of Mountaire Farms says her company has held similar truckload sales for consumers in parking lots of churches and grocery stores.
“The marketplace has changed,” she said. “Once the orders came down that restaurants closed — that’s a big part of what we do is supplying to restaurants. That said,the demand in grocery stores went through the roof because everyone was panic buying. All of a sudden grocery stores didn’t have chicken … So we’ve adapted quickly. A lot of the product that we normally might have sold to restaurants was then sold to grocery stores.”
Porter emphasizes that all parts of the industry will be impacted by COVID-19.
“It may start at the company but then also trickles down to the growers as well,” she said. “We want to make sure any and all aid is available to anyone that is impacted.”
Porter says her trade group has been in discussions with state and national lobbying groups about getting aid to farmers, “whether it's looking at another stimulus package [or] looking at the funds through the USDA and how those are going to be distributed.”
“We want to make sure that farmers are able to come out of this and are able to continue to operate long after the pandemic is hopefully gone,” she said.