Factory farming and the food industry are just plain strange (also: scary)
The era of Big Bird (Meat & Poultry industry newsletter, free registration required)
The eight-pound chicken is changing processing and the industry
(MEATPOULTRY.com, January 01, 2008)
by Steve Bjerklie
Back in October, Tyson Foods confirmed what the poultry industry had been buzzing about for weeks: the processing giant had been issuing new contracts to its poultry growers since August, with higher per pound rates being paid for larger birds for some of its processing plants. In effect, Tyson raised the standard size for birds from 6.5 pounds to eight pounds for at least two of its operations. The ripple effects across the industry of such a move reach into barns, the distribution network, product development and into processing. No question about it, the Big Bird era has arrived.
In truth, chickens have been bulking up for years, even decades, all the way back to the dawn of modern poultry processing. A look at the history of market live weights shows that 41 years ago, in 1967, the average live weight of a chicken at slaughter in the U.S. was just 3.5 pounds, according to the U.S. Dept. of Agriculture. By the 1980s the weight had increased to more than four pounds, and in the 1990s it jumped to more than four-and-a-half pounds. Matching the climb in live weight was an increase in chicken consumption, from 24 pounds annually in 1960 to 72 pounds per capita annually 35 years later.
Also matching the trend line toward larger birds was a trend in what happened inside processing plants. As recently as 1980, half the chickens raised and processed in the U.S. were still sold whole, and in this regard the chicken processing industry even just a generation ago still wasn’t much removed from the days when nearly all chicken was sold whole, out of wooden barrels. In 1980, according to USDA figures, 40 percent of chicken was cut up, and just a scant 10 percent was further processed. The big roasted chicken, as whole and obvious as a Thanksgiving turkey, was still king of the industry.
Today, according to the National Chicken Council, just 11 percent of birds are retailed whole. Close to half, 43 percent, are cut up, and even more, 46 percent, are further processed.
Driven by demand
"It’s been a long-term trend. Beginning in the 1980s, you started seeing new plants in the industry that were dedicated to deboning breast meat," says poultry economist Paul Aho. "Americans wanted more and more deboned breast meat, even though the price increased significantly. And the difference between a five-pound bird and a six-pound bird is the sixpound bird has more breast meat. So demand was driving it. There was a strong economic incentive to produce larger and larger birds.
"The deboning category has grown continuously," confirms Richard Lobb, spokesman for the NCC. "It was about 10 or 12 years ago when demand for white meat really took hold. It was a huge change in the industry and a whole different way of thinking about chicken. Old-timers will tell you that back in that day, they practically had to give away white meat, strange as that may seem. Now the market is driven by white meat."
Lobb calls the introduction of Chicken McNuggets by McDonald’s in the early 1980s, plus the first appearances of skinless, boneless breasts at retail at about the same time, as the turning points. "A tremendous amount of growth has come from the fast-food sector," he says. "McDonald’s still buys almost nothing but white meat. The growth we‘ve seen has been particularly strong on the foodservice side - not just McNuggets, but chicken strips, chicken tenders and strips for salad. There’s been some growth at retail, too, especially in frozen convenience products, which are further-processed. All of these further-processed products, whether for retail or foodservice, need lots of white meat."
Lobb adds that the change has impacted processing plants significantly. "The cut-up departments got much, much larger, and plants had to make room to accommodate them, either by expanding or in new construction. There’s also been a lot more interest in automation as a result of the emphasis on deboning."
The non-stop increase in demand for breast meat puts pressure on poultry processing at precisely the spot where it’s weakest right now: manpower. Manual boning lines require dozens of workers to operate at capacity, but finding and keeping employees is a troublesome issue for many poultry processors. And with full deboning automation still several years away - if the technology ever fulfills its promise - the labor issue isn’t going to go away soon.
In the old, small-bird days, a four pound broiler would produce two or three portions per breast, but today’s big-bird breasts can produce six or even seven portions, in part because demand has increased for small-portion products like strips. It’s way more throughput now," comments Russ Williams, marketing manager for Gainesville, Ga.-based Gainco Inc., which manufactures weighing, sizing and yield-management systems. "As the birds have gotten larger, the foodservice market wants smaller pieces. Processors are trying to adapt with a lot of traditional equipment - the traditional cone system is still prevalent." He thinks the biggest opportunities in the Big Bird era may be for portion-control companies, which now have a bonanza of deboned meat available to them.
But some equipment suppliers have adapted or re-engineered machinery to accommodate the larger birds, which sometimes exceed even eight pounds, according to Wouter Veerkamp, product manager for Meyn in the Netherlands. "In 2000, Meyn did an intensive R&D project in which all of the evisceration machinery was adapted for processing birds up to 12 pounds live weight," he says. "Of course, it is not possible to process these birds on a six-inch shackle pitch because the birds are too wide. So besides the standard six-inch line [that is, shackle spaces at six inches apart], Meyn can offer a specialized eight-inch line for heavy birds. All machines for the heavy-birds line are adapted for processing them."
Veerkamp says birds up to eight pounds will still run on Meyn’s standard six-inch evisceration line without special requirements "besides good adjustment by trained personnel."
Meyn’s U.S. product manager, David McNeal, agrees with NCC’s Richard Lobb that the larger birds have created a corresponding larger demand for deboning, which pressures labor needs in processing plants beyond the slaughter and evisceration points. But McNeal says the old Streamline Inspection System (SIS), which is designed for 70 birds per minute, and the New Line Speed inspection system, (NELS), designed for 90 birds per minute, can create labor issues. The Meyn system utilizes total viscera removal and can process carcasses at 140 birds per minute on both six-inch and eight-inch equipment, Mc-Neal says. "This high-speed inspection system can eliminate two SIS lines for one high-speed Meyn Maestro line, and will reduce staffing in evisceration in this way. An SIS line will need people to present the viscera for inspection personnel to view and make a disposition; with the total viscera removal, these jobs are not necessary," he said. In September of this year, Meyn received approval from the FSIS’s New Technology Office to process broilers on eight-inch centers at 140 birds per minute. The approval took two years to receive and is the only one in the industry. It is the regulatory catalyst, Veerkamp noted, for the trend toward the processing of heavier birds, even above eight pounds.
Gainco’s Williams says the increased number of portions, coupled with much more available breast meat, has caused processors to pay particular attention to yield. "How the yield is measured has a lot to do with the tooling around it," he points out. "Machines have to be properly calibrated, and employees operating equipment have to be properly trained." Unless employees are using technology properly, Williams says, "you’re not getting the yield you should be getting, and that’s money left on the table."
The antagonism of feed
Another issue: As birds grow older and larger, their rate of feed conversion declines. A bird will gain its fifth pound more quickly than it gains a seventh or eighth pound. In a time of increasingly high grain prices, the equation worries producers. "Heavy birds and high grain prices - those things are antagonistic," says Paul Aho, the economist. But he thinks grain prices aren’t going to come down soon.
The cost of energy is also a factor. Bud Phillips, a chicken producer in Carroll County, Ark., told the Arkansas Democrat-Gazette that raising birds to eight pounds for Tyson will increase production time 10-13 days per flock. Over time that means fewer flocks to produce income but higher utility costs, particularly in the final two weeks of grow-out. "Tyson is telling me that my utilities will go up about 20 percent, which on my farm comes to $7,000 a year," Phillips told the newspaper. According to the new contract, farmers willing to upgrade their houses to premium pay contracts, which require cool cell systems and better water supplies, can add another half-cent per pound. In the new Tyson contract, chicken farmers can receive two energy allowance payments of $0.055 per pound between November and March, when propane and natural gas are used to heat the houses.
On the large scale, though, Aho sees more benefit than problems. "There’s always a downside," he points out, "when you produce too much of something or there’s too much demand. Breast meat used to be $2 a pound; now it’s $1 a pound at a time when the dollar has less value. The profit margin has been declining over time. But it’s a competitive market, and the sign of that is declining prices. That’s how the economy is supposed to work."
The eight-pound chicken is changing processing and the industry
(MEATPOULTRY.com, January 01, 2008)
by Steve Bjerklie
Back in October, Tyson Foods confirmed what the poultry industry had been buzzing about for weeks: the processing giant had been issuing new contracts to its poultry growers since August, with higher per pound rates being paid for larger birds for some of its processing plants. In effect, Tyson raised the standard size for birds from 6.5 pounds to eight pounds for at least two of its operations. The ripple effects across the industry of such a move reach into barns, the distribution network, product development and into processing. No question about it, the Big Bird era has arrived.
In truth, chickens have been bulking up for years, even decades, all the way back to the dawn of modern poultry processing. A look at the history of market live weights shows that 41 years ago, in 1967, the average live weight of a chicken at slaughter in the U.S. was just 3.5 pounds, according to the U.S. Dept. of Agriculture. By the 1980s the weight had increased to more than four pounds, and in the 1990s it jumped to more than four-and-a-half pounds. Matching the climb in live weight was an increase in chicken consumption, from 24 pounds annually in 1960 to 72 pounds per capita annually 35 years later.
Also matching the trend line toward larger birds was a trend in what happened inside processing plants. As recently as 1980, half the chickens raised and processed in the U.S. were still sold whole, and in this regard the chicken processing industry even just a generation ago still wasn’t much removed from the days when nearly all chicken was sold whole, out of wooden barrels. In 1980, according to USDA figures, 40 percent of chicken was cut up, and just a scant 10 percent was further processed. The big roasted chicken, as whole and obvious as a Thanksgiving turkey, was still king of the industry.
Today, according to the National Chicken Council, just 11 percent of birds are retailed whole. Close to half, 43 percent, are cut up, and even more, 46 percent, are further processed.
Driven by demand
"It’s been a long-term trend. Beginning in the 1980s, you started seeing new plants in the industry that were dedicated to deboning breast meat," says poultry economist Paul Aho. "Americans wanted more and more deboned breast meat, even though the price increased significantly. And the difference between a five-pound bird and a six-pound bird is the sixpound bird has more breast meat. So demand was driving it. There was a strong economic incentive to produce larger and larger birds.
"The deboning category has grown continuously," confirms Richard Lobb, spokesman for the NCC. "It was about 10 or 12 years ago when demand for white meat really took hold. It was a huge change in the industry and a whole different way of thinking about chicken. Old-timers will tell you that back in that day, they practically had to give away white meat, strange as that may seem. Now the market is driven by white meat."
Lobb calls the introduction of Chicken McNuggets by McDonald’s in the early 1980s, plus the first appearances of skinless, boneless breasts at retail at about the same time, as the turning points. "A tremendous amount of growth has come from the fast-food sector," he says. "McDonald’s still buys almost nothing but white meat. The growth we‘ve seen has been particularly strong on the foodservice side - not just McNuggets, but chicken strips, chicken tenders and strips for salad. There’s been some growth at retail, too, especially in frozen convenience products, which are further-processed. All of these further-processed products, whether for retail or foodservice, need lots of white meat."
Lobb adds that the change has impacted processing plants significantly. "The cut-up departments got much, much larger, and plants had to make room to accommodate them, either by expanding or in new construction. There’s also been a lot more interest in automation as a result of the emphasis on deboning."
The non-stop increase in demand for breast meat puts pressure on poultry processing at precisely the spot where it’s weakest right now: manpower. Manual boning lines require dozens of workers to operate at capacity, but finding and keeping employees is a troublesome issue for many poultry processors. And with full deboning automation still several years away - if the technology ever fulfills its promise - the labor issue isn’t going to go away soon.
In the old, small-bird days, a four pound broiler would produce two or three portions per breast, but today’s big-bird breasts can produce six or even seven portions, in part because demand has increased for small-portion products like strips. It’s way more throughput now," comments Russ Williams, marketing manager for Gainesville, Ga.-based Gainco Inc., which manufactures weighing, sizing and yield-management systems. "As the birds have gotten larger, the foodservice market wants smaller pieces. Processors are trying to adapt with a lot of traditional equipment - the traditional cone system is still prevalent." He thinks the biggest opportunities in the Big Bird era may be for portion-control companies, which now have a bonanza of deboned meat available to them.
But some equipment suppliers have adapted or re-engineered machinery to accommodate the larger birds, which sometimes exceed even eight pounds, according to Wouter Veerkamp, product manager for Meyn in the Netherlands. "In 2000, Meyn did an intensive R&D project in which all of the evisceration machinery was adapted for processing birds up to 12 pounds live weight," he says. "Of course, it is not possible to process these birds on a six-inch shackle pitch because the birds are too wide. So besides the standard six-inch line [that is, shackle spaces at six inches apart], Meyn can offer a specialized eight-inch line for heavy birds. All machines for the heavy-birds line are adapted for processing them."
Veerkamp says birds up to eight pounds will still run on Meyn’s standard six-inch evisceration line without special requirements "besides good adjustment by trained personnel."
Meyn’s U.S. product manager, David McNeal, agrees with NCC’s Richard Lobb that the larger birds have created a corresponding larger demand for deboning, which pressures labor needs in processing plants beyond the slaughter and evisceration points. But McNeal says the old Streamline Inspection System (SIS), which is designed for 70 birds per minute, and the New Line Speed inspection system, (NELS), designed for 90 birds per minute, can create labor issues. The Meyn system utilizes total viscera removal and can process carcasses at 140 birds per minute on both six-inch and eight-inch equipment, Mc-Neal says. "This high-speed inspection system can eliminate two SIS lines for one high-speed Meyn Maestro line, and will reduce staffing in evisceration in this way. An SIS line will need people to present the viscera for inspection personnel to view and make a disposition; with the total viscera removal, these jobs are not necessary," he said. In September of this year, Meyn received approval from the FSIS’s New Technology Office to process broilers on eight-inch centers at 140 birds per minute. The approval took two years to receive and is the only one in the industry. It is the regulatory catalyst, Veerkamp noted, for the trend toward the processing of heavier birds, even above eight pounds.
Gainco’s Williams says the increased number of portions, coupled with much more available breast meat, has caused processors to pay particular attention to yield. "How the yield is measured has a lot to do with the tooling around it," he points out. "Machines have to be properly calibrated, and employees operating equipment have to be properly trained." Unless employees are using technology properly, Williams says, "you’re not getting the yield you should be getting, and that’s money left on the table."
The antagonism of feed
Another issue: As birds grow older and larger, their rate of feed conversion declines. A bird will gain its fifth pound more quickly than it gains a seventh or eighth pound. In a time of increasingly high grain prices, the equation worries producers. "Heavy birds and high grain prices - those things are antagonistic," says Paul Aho, the economist. But he thinks grain prices aren’t going to come down soon.
The cost of energy is also a factor. Bud Phillips, a chicken producer in Carroll County, Ark., told the Arkansas Democrat-Gazette that raising birds to eight pounds for Tyson will increase production time 10-13 days per flock. Over time that means fewer flocks to produce income but higher utility costs, particularly in the final two weeks of grow-out. "Tyson is telling me that my utilities will go up about 20 percent, which on my farm comes to $7,000 a year," Phillips told the newspaper. According to the new contract, farmers willing to upgrade their houses to premium pay contracts, which require cool cell systems and better water supplies, can add another half-cent per pound. In the new Tyson contract, chicken farmers can receive two energy allowance payments of $0.055 per pound between November and March, when propane and natural gas are used to heat the houses.
On the large scale, though, Aho sees more benefit than problems. "There’s always a downside," he points out, "when you produce too much of something or there’s too much demand. Breast meat used to be $2 a pound; now it’s $1 a pound at a time when the dollar has less value. The profit margin has been declining over time. But it’s a competitive market, and the sign of that is declining prices. That’s how the economy is supposed to work."