Contract Poultry Farming

Tyson Foods is one of the leading supporters of American agriculture and we know that without successful farmers we do not have a chicken business. We pay more than $800 million annually to more than 4,000 independent poultry farmers who contract with us.
Farmer Jacque Smith talks about being a poultry farmer for Tyson Foods.

What is contract poultry farming?

The practice of farmers raising chickens under contract for poultry processing companies has been around since the 1930s and is the industry standard. Tyson Foods has been working with poultry farmers on a contract basis since the late 1940s and it’s been a relationship we believe works well for both the farmer and the company. We supply the birds and feed, and provide technical advice, while the poultry farmer provides the labor, housing and utilities. This cooperation between Tyson Foods and family farms increases efficiency and quality, while maintaining affordable prices for consumers.

The average farmer has been raising chickens for Tyson Foods for 15 years. Some farm families have been raising chickens for us for three generations.

What are the benefits for farmers?

Contract farming insulates the farmer from the risk of changing market prices for chicken and feed ingredients such as corn and soybean meal, which represents the majority of the cost of raising chicken. So, farmers’ compensation is not dependent on what the feed costs or prices at the grocery store.

How long have most contract farmers been raising chickens for Tyson Foods?

The average contract poultry farmer has been raising chickens for Tyson Foods for 15 years. Some farm families have been raising birds for us for three generations. We frequently receive inquiries from additional people interested in raising chickens for us.

How long are Tyson Foods’ contracts with poultry farmers?

Our contracts with farmers are typically three to seven years or longer.

How are the farmers for broiler chickens paid?

We provide poultry farmers with written contracts detailing how payments will be calculated. Poultry farmers are essentially paid for how well they take care of the chickens and how much weight the birds gain while they’re on the farm. We use a performance-based incentive system that rewards poultry farmers who effectively convert the feed we provide into weight gain in the birds they raise. The payment formula includes such factors as the number of birds, the amount of feed used, the performance of their flock compared to those raised by other contract growers and the weight of the birds delivered to the processing plant.

Is Tyson Foods the only poultry company using this payment system?

The performance-based pay program we offer farmers is not unique to Tyson Foods. It’s used by many poultry processing companies in the U.S. to determine farmer compensation.

How much money does a farmer make?

Income from chicken farming varies and depends on a number of factors. For some farmers, it’s a sole source of income. For many, it’s supplemental income to another job or the raising of crops or other livestock. In fact, a 2014 study by the U.S. Department of Agriculture found that the median income of contract poultry farmers exceeds other farm households.

Are there federal regulations protecting broiler chicken farmer rights in a contract relationship?

The poultry processor-broiler chicken farmer relationship is extensively regulated by federal law. For example, by law growers are entitled to:

  • A written copy of their contract with the poultry company.
  • Information detailing how much they are paid.
  • Information explaining how a contract can be cancelled.
  • Right to a 90-day written notice of the processor’s intention to terminate the contract.
  • Right to terminate the contract with the processor by giving a 90-day written notice.
  • Right to discuss their contract with outside parties.
  • Right to join an association of growers.

Do chicken farmers need to take on debt to start or expand their business?

Chicken farming is like any other business; people often have to borrow some money to start, improve or expand their operations. Each of our contract chicken farmers must decide on their own the size and scope of their operations and how much debt they are willing to take on.

Do you require farmers to upgrade their chicken houses?

Other than improvements, maintenance, or repairs to address animal well-being issues, we do not require equipment or housing specification upgrades in the middle of contracts. In recent years, the technology to modernize chicken housing has become more widely used in the industry and benefits are better known, so we require farmers to meet a set of housing specifications that are outlined in the contracts. The benefits of more modern housing include a more comfortable living environment for the birds with improved ventilation and more uniform temperatures through the barn. It also saves energy to heat and cool the house which is a savings for the farmer.

Does Tyson Foods help chicken farmers experiencing problems with the performance of their farm?

We work closely with our farmers, including regular visits from our Service Technicians and Animal Well-being Specialists to provide technical advice , answer questions and ensure best animal management practices. If a farmer’s operation is not performing well, we have a program in place designed to help them get back on track.

What types of rights do farmers have as part of their contract?

All farmers who grow chickens for Tyson Foods have rights, which are part of their contract. The rights are outlined in the Contract Poultry Farmers’ Bill of Rights.

 

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