Two
Examples of Commodity Chains:
Poultry
and Pork in the United
States
Because
the concepts of commodity/food chains or circulation systems are so
fundamental to an understanding of current food supply, two examples will be
discussed in some detail:
Poultry
In
the 1930s, feed dealers in the American south realized that they might be able
to expand their business by providing farmers with newly hatched chicks and feed
for the birds on credit. The farmers would be able to repay the loans when the
birds were sold. Until this time, most farm across the United States had a small
barnyard flock of chickens that survived by scavenging and getting handouts from
the farmer's wife who usually had responsibility for the birds and took the
profits from selling eggs in the town. The birds were harvested for meat at the
end of their useful life as layers, and chicken was reserved for a Sunday
dinner. The mass production of chickens, called broilers, has so revolutionized
poultry production that chicken in now the cheapest meat in the
United States
and the most commonly
consumed.
Today
chickens are produced in the following way:
·
Large
agribusiness companies operate hatcheries, feed mills, and processing plants.
·
They deliver
day-old chicks to the farmers.
·
The farmers are
responsible for building a house and maintaining proper temperature and water.
·
The companies
come to the farm to fill the feed bins once a week and guarantee the farmer a
price for the birds.
·
When the birds
are ready for market, the companies collect them from the farm for processing
and marketing.
Most
of the nation's poultry supply is handled by a half-dozen large corporations
that control the process from chicks on farms to chicken pieces in stores.
Over the years, selected breeding has produced a very efficient chicken. In
1940, it took about 17 pounds of feed and about 15 weeks to produce a four-pound
broiler. Forty years later, it took only eight pounds of feed and 7 to 8 weeks
to produce the same size bird. In that same forty years, the size of the
operations increased dramatically. Broiler houses that contained 1,500 birds
were considered large in 1940, but now, contemporary broiler houses hold 20,000
birds or more. In addition, mechanization of water and feeding operations has
reduced labor requirements from about 250 hours per thousand birds in 1940 to
fewer than 25 hours today.
Broiler
production is an attractive option for small farmers because it requires only a
few hours of labor a day, which allows time for off-farm employment. Broiler
production is concentrated in intensely specialized areas that are widely
scattered. The modern broiler industry developed on the eastern seaboard before
World War II. It then grew rapidly in northeastern
Georgia
and northwestern
Arkansas
immediately after the War.
Subsequently, concentrations developed in central
Mississippi
, northeastern and
northwestern
Georgia
, the Piedmont areas of
North Carolina
, and the
Shenandoah Valley
area of
Virginia
.
Many
people believe that the broiler production process is manufacturing and not
farming, because it is not directly connected to the land. The areas that
produce large numbers of chickens are districts that are feed deficient. That
is, the feed that is consumed by the birds has to be shipped in, primarily from
the
Midwest
. The long, low one-story
broiler houses are essentially factories that use birds as machines to convert
the raw materials corn and soy beans into a finished product — meat for human
consumption.
Chickens
are also efficient producers of manure, and one of the major issues of broiler
production has been the disposal of the manure. While ideally it should be
returned to the land because it's excellent fertilizer, manure is fed back to
animals. The manure is rich in protein, and after it has been dried and flavored
with molasses, it looks like soy bean meal and can be fed to either chickens or
cattle.
Pork
In
the last decade, there has been a dramatic change in the distribution of hogs.
Currently, the center of pork production is in an area that is on the fringe of
the most productive region in
North America
. Pork is concentrated in
North Carolina
,
Texas
, and
Oklahoma
. One county alone in
Oklahoma
produced 2 million hogs. It
is the center of an area that produced four million hogs which is four percent
of the national total, and one-seventh of the total hog production of
Iowa
.
These
hog farms are significantly different than the traditional farms of the
Midwest
. They look more like chicken
or turkey houses than traditional hog pens. Each farm has long, low metal
buildings. The structures are in rows on dry ground and they tend to be
located in the corners of large fields. The larger area of the field is under a
center-pivot irrigation system that creates a large circle of cropland.
The hog manure is flushed from these houses into a lagoon where the solids
settle, liquid evaporates and bacteria break down the fecal material. At
appropriate times, the liquid in the lagoon is pumped out on the fields and
cycled through the center-pivot irrigation system and put back on the land.
These farmers work on contracts and are receiving 14-day old piglets weighing
about a dozen pounds. The piglets are held on the farms in various pens until
they reach about 275 pounds and are approximately six months old when they are
transported to a processing plant.
Pork
production is vertically integrated. Processors have built slaughterhouses in
these production regions that can handle around a thousand hogs an hour.
Therefore, without stretching the system, about 2 million hogs can be processed
in a year. Corporations such as Seaboard Corporation, Inc. — a diversified
international food-producing region with operations throughout the world raising
shrimp and fish, marketing various kinds of grain — dominates the pork
production region in Oklahoma. The scale of these operations is enormous.
Farmers contract with the processor to deliver between 300,000 and 500,000 hogs
a year. The Oklahoma Panhandle is able to engage in this intensive hog
production because of the adequate supply of groundwater from the Ogallala
Aquifer. Water for irrigation is inexpensive, and the natural gas used to pump
it is also cheap. The local farmers are able to produce good crops of feed
grain, such as corn and sorghum, for part of the ration for the hogs.
According to
U.S.
government figures for 1997,
the highest ranking counties in terms of the value of hogs and pigs sold were
Samson
County
in
North Carolina
with $511,000 and in
Upland
North Carolina
with $510,000. Most of the concentration of pork is
still within the traditional corn-belt. In 1997
Iowa
ranked number one,
Minnesota
three,
Illinois
four,
Missouri
five, and Indiana six. If we look at numbers of animals 1997, there were 61 million hogs in the
United States
.
In
response to these large-scale pork palaces in
North Carolina
and
Oklahoma, traditional pork producers
in the corn-belt have had to change their ways of production. Gone are the days
of small hog feedlots on farms that were engaged also in a variety of crop
production activities. Today the
Midwest
is also changing itself into
a pork factory operation through contracting. In the
Midwest
, companies like Hormel
Foods, Cargill Inc., and Land 'o Lakes — a farmer cooperative — are in pork
production in all forms. The companies have pig breeding farms, they supply the
young pigs to the farmers and then provide feed as well as veterinarian service.
The farmer is guaranteed a price for the pork if the farmers are raising the
hogs according to the instructions of the company. This enables the farmers to
have access to the most highly developed breeds of hogs and to market their hogs
without worrying about fluctuations in the price of pork.
This in turn enables the corporations to have a ready market for their
grain. A typical family-operated farm in
Minnesota
would have about 4,000 pigs
on the farm at any given time.
Questions:
All answers must be put in your own words (paraphrased), not simply copied
(plagiarized).
1.
How are chickens produced today as compared to the past?
2. How many pounds of feed and how many weeks
did it take to produce a four-pound broiler in 1940? In 1980?
3. How and why is the chicken manure fed back to
them?
4. Where is the center of pork production in the
U.S. today?
5. In what way do modern hog farms look
more like chicken or turkey houses than traditional hog pens?
6. Explain how the Midwest is changing itself
into a massive pork factory operation.
Questions
for ARGUS Poultry Bigjob Activity:
Changing
Demand
7. Where were broiler chickens primarily raised
in the United States in 1929? Where are broilers mainly produced today?
8. How much more chicken do we eat today than
Americans in the 1930s?
Changing
Prices and Costs
9. What was the average price per pound for a
chicken in 1950? In 1985?
10. How specifically do economies of scale
affect the price of chicken? How does site and situation affect the price
of chicken? (Cite two examples for each)
Changing
Production Methods
11. Why are most chickens raised in "broiler
houses" and not outdoors? (Cite two reasons)
12. Explain how large producers such as Purina
and Perdue are vertically integrated.
Consequences
and Questions
13. How do the average wages of a poultry
processing worker compare with the average wages of all US factory workers?
14. List some of the tasks a chicken-factory
line worker must perform.
15.
List two factors that will determine the future of the broiler production and chicken processing industries?