Trends Affecting Poultry Farmers in the United States and Beyond
At the end of 2021, US President Joe Biden signed executive orders to “empower family farmers and increase their incomes by strengthening the tools of the Department of Agriculture to end the abusive practices of certain meat processors”. He refers to a lack of competition in the U.S. meat and poultry processing sectors that his administration says has caused damage to consumers, farmers and the U.S. economy.
The associated funding will increase competition and create more options for producers and consumers in the short term by launching 15 independent processing projects. In the long term, the US Department of Agriculture will also work with banks and other lenders to make more capital available to independent processors, allowing them to grow.
Focus on farmers
For insight into this issue and other trends, we reached out to representatives from Farmer Focus (FF), an American organic poultry company that already operates as an independent processor and partners with farmers to help them conserve control of their agricultural businesses for generations to come. In 2021, FF was the fastest growing chicken brand. In 2022, the company’s “pre-seasoned” products, which have received multiple NEXTY awards for flavor innovation, will be launched. Product flavors include black garlic, umami and Middle Eastern (tahini, sumac and pomegranate).
Biden’s bold move
FF CEO and Founder Corwin Heatwole applauds Biden’s commitment to supporting independent transformation which, in turn, supports the financial viability and sustainability of America’s chicken farms. He sees 2 main problems for farmers that have been caused by the dominant business model of the chicken industry in the United States – integrated conglomerates contracting out farmers to raise birds, with no farmer ownership of birds. These issues are a lack of farm control for farmers with a payment system that pits them against each other.
Stories of farms returning to success after being on the verge of bankruptcy. You even see the next generation coming back to the farm.
This year, FF plans to continue to develop its partner farmer model while celebrating progress. The company has already seen the average age of its farmers hover about 10 years below the national average age of farmers, among other benefits.
“We’ve found that when you give farmers ownership and control, allowing farms to be viable and sustainable for the next generation, incredible success stories emerge,” says Heatwole. “Stories of farms returning to success after being on the verge of bankruptcy. You even see the next generation coming back to the farm.
Market and supply chain pressures
Right now, as the Biden administration mentioned, meat and poultry prices are high. They are even higher now due to pandemic-related inflation. However, a lack of competition in the industry also plays a role in driving up chicken prices, as does supply and demand. These factors, in turn, are typically driven by things like scarcity of food ingredient supply, labor shortages, and supply chain disruptions. FF CFO Debarshi Sengupta explains that all of these forces are currently creating a strong push and pull in the US chicken market.
“We are facing a faster than expected period of economic recovery that is characterized not only by increased consumer demand for food and beverages (more food consumption both outside and at home) , but also by significant global raw material supply issues, supply chain disruptions, labor shortages and increased labor attrition,” says- 11. “All of this translates into significantly higher input costs that consumers ultimately see reflected in list prices.”
Grocery prices on the rise
Sengupta adds that according to S&P Capital IQ Market Intelligence, the cost of groceries rose 4.5% YoY in September 2021. Sengupta advises food processors to assess their entire supply chain in order to identify their cost pressure points and take strategic and methodical action in partnership. with vendors and suppliers. “In the same vein, food processing customers should also recognize the pressures food processors are facing due to rapidly inflating input costs,” he says, “and address the pressures of cost inflation in a collaborative way.
Meat demand exceeds supply
FF Sales Director Ed Hinson adds that the meat supply chain is currently in a situation where demand exceeds supply. More and more people are cooking at home and grocery stores are busy. “We’re seeing foot traffic increase 13% year-over-year at select retail partners,” he says. “When you look at the meat supply chain, it takes weeks for poultry to catch up with demand, months for pork and years for beef due to on-farm lead times. Even though Covid-19 is no longer an issue for long, there will be a recovery period for the supply chain.
What consumers want
Kathryn Tuttle, FF’s director of marketing, notes that many trends are currently affecting poultry consumption. One is consumer interest in meat “based on claims” (claims on packaging regarding health, shared values, etc.). Consumers are also “hungry” for new meat products and interested in plant-based “meat” products. Regarding products based on claims, Tuttle states that “younger shoppers tend to focus more on health and values while being less meat-centric, so to keep them in the category, the emphasis will increasingly focus on unique product attributes (human, paleo, etc.) and brand benefits (sustainability, social good, etc.).
She adds that “cooking at home since the start of the pandemic has been a trend that we are seeing have some staying power. Due to this trend, consumers are increasingly demanding quick and easy at-home options that don’t sacrifice taste, ingredient quality, or health. »
Farmer Focus only sells certified organic chicken that is cruelty-free, gluten-free, halal and raised on independent family farms. Their farmers “report that they earn between 25 and 35 percent more with us than with our competitors,” says Tuttle. She also notes that “despite all this added value we bring to retail consumers, the price of our chicken is competitive in the market and is often in the average of organic chicken prices on the shelf. This speaks to the effectiveness of our unique business model in driving efficiencies while delivering more value to consumers. »
Traceability is another product attribute that will continue to be important to consumers. Like other brands, FF already makes sure all of its products feature a farm ID to trace the chicken back to the farmer who raised it. “We frequently hear from customers who have used our Farm ID to trace their farmers and contact us to personally thank that farmer for putting food on their table,” says Heatwole. “There’s something special about making our food system more personal again.”