Poultry system sticks farmers with waste
ANTIOCH - Paul Homan is a poultry farmer, but he doesn't own any birds.
About six times a year, WLR Foods in Moorefield delivers truckloads of chicks to Homan's six chicken houses off Knobley Road in Mineral County. The company brings him the feed, too. And WLR agents stop by regularly to check on the birds.
About two months later, WLR truckers return to pick up the company's full-grown birds. They haul the birds back to Moorefield, where they're slaughtered, carved up and packed.
Homan is left with six chicken houses full of manure.
This is the world of modern poultry production in the Potomac Valley.
It's called vertical integration. The integrators - big processing companies like WLR, Tyson and Purdue - control each step up the poultry production ladder. They breed birds. They hatch chicks. They decide which farmers get how many chicks, and how much of what kind of feed those chicks are fed. Integrators also decide how much poultry farmers are paid. They use a complicated formula that many farmers don't like and many others say they just don't understand.
But when the time comes to dispose of chicken waste, farmers are left pretty much on their own.
Critics say Homan and hundreds of other Potomac Valley farmers who grow chickens for WLR get stuck with a load of crap - figuratively and literally. The system, critics say, helps WLR get rich, pollutes the Potomac River, and leaves poultry farmers struggling just to get by.
"It's a real racket for the companies," said Mary Clouse, who studies the poultry industry for the Rural Advancement Foundation International in North Carolina.
A chicken boom
Growth of the poultry industry in West Virginia's eastern counties has been a boon for Broadway, Va.-based WLR Foods.
The company, formerly known as Wampler-Longacre, has set sales records every year - and nearly tripled its sales - since it bought and expanded a poultry processing plant in Moorefield in 1988.
Gross sales topped $1 billion for the first time ever in the financial year that ended June 28, the company reported. In 1988, the company reported sales of only $381 million. WLR has lost money on those record sales the last two years. But company reports show the losses were caused by severe market conditions, such as high feed prices, that should stabilize over time and have WLR making money again.
Farmers along the South Branch and Lost River built more than 300 new poultry houses between 1991 and 1995 to feed the expanded WLR plant's appetite. A network of growers, most within 25 miles of Moorefield, provide the plant with 90 million birds a year.
"We've got a lot of real good growers in West Virginia," said Mike Ellington, live production manager of WLR's Moorefield plant. "We depend on them to be looking after the birds 24 hours a day, seven days a week."
Gail Price, director of corporate communications for WLR, pointed to Robert E. Williams Jr. as an example.
Every day, at a farm just outside Moorefield, Williams checks to make sure automatic temperature gauges open poultry house windows or turn on fans at the right time. He makes sure automated feed dispensers are full. Every once in a while, he gathers up any of the 30,000 seven-day-old chicks in each house that have died.
"The more successful this man is, the more successful we are," Price said. "We know the critical difference is his control and his attention to detail and his hard work."
Some farmers like the grower-integrator setup. Poultry houses give them extra income to keep farms afloat or send their kids to college.
"I don't have any complaints, as far as the money goes," Williams said. "I've been doing pretty good."
Homan agreed. "We're doing average," he said. "The poultry houses are paying for themselves."
But overall, the folks who raise poultry are not sharing in the industry's success. And they aren't happy about it.
Eighty-five percent of the poultry growers surveyed earlier this year by the West Virginia Farm Bureau said they were not happy with their pay. More than 77 percent said the payment system isn't fair. More than 88 percent said they don't even understand how the company decides how much to pay them.
Scared to speak out
Poultry growers who answered the Farm Bureau's questions didn't give their names. Most are scared to openly criticize WLR or other poultry processors.
"If you make too much noise about a problem, there can easily be a tightening of the chain, so to speak," said Ken Spence, public information officer for the Farm Bureau.
"You borrow money to build these houses and go into this business, and you've got this debt obligation," he said. "You're at the mercy of the integrators, and they know it."
According to state and federal reports, the average poultry farmer in Hardy County owns three chicken houses. He probably borrowed close to $400,000 to build and equip them. Over the next decade, most of his earnings will go to pay off those loans.
If he's lucky, he might make a few thousand dollars per house after mortgage payments and expenses. But the need for equipment upgrades and maintenance will probably eat into that. By the time the houses are paid off and real money starts rolling in, it's time to borrow more for poultry house renovations.
"When you get in the poultry business, you shouldn't be thinking you'll make a lot of money," said Andy Walker, a poultry specialist with the state Soil Conservation Agency's Moorefield office.
"It's a supplemental income," said Walker, who raises chickens himself on the side. "It works for some people and for some it doesn't."
It doesn't work for most, according to groups that lobby on behalf of poultry farmers.
"Farmers talk about it as slavery, as being an indentured servant, as being a serf on your own land," said Clouse of the Rural Advancement Foundation. She reports that a widely quoted estimate of average income per poultry house, $4,000, overstates what most growers really make.
"If the farmers' full expense list and income data were used to figure average net income, the average net income would be close to nothing," Clouse wrote in a 1995 report.
"Worse yet, if there were any of the usual farm problems connected with raising livestock, variations in the placement of the flocks per farm, variations in interest rates, variations in the desired weight of the birds to be raised, most company projections and university studies would have to be adjusted downward."
Growers say they are paid through a system that is based on "artificial competition shrouded in secrecy," according to Carole Morison of the National Contract Poultry Growers Association in Louisiana.
Poultry processors like WLR encourage growers to raise birds with the most meat while feeding the birds the least amount of food. Growers who raise the biggest birds with the least amount of food are paid the most. Growers who raise even bigger birds, but with a lot more feed, might get paid less.
But companies may supply some growers with breeds of birds that gain weight faster. They might give others slightly different feed. Others growers may get better service personnel from processing companies. Some growers may be located in areas where the weather is worse than others.
"Growers have no control over the breed or condition of the chickens placed on their farms or any medications which might be used on the farm," Morison says. "In order for growers to be truly competitive, they would have to receive identical inputs, which is virtually impossible."
Making ends meet
Poultry farmers who struggle just to pay their mortgages don't have much money to spend to protect the environment. And getting rid of chicken litter is no easy task.
Each flock of 20,000 or 30,000 chickens produces about 30 tons of litter. A chicken farmer with three houses who raises six flocks a year has to dispose of more than 540 tons of litter a year.
Overall, farmers along the South Branch and Lost River need to get rid of at least 150,000 tons of litter a year. That's more than 10 times the solid sewage produced by the city of Charleston annually.
If this litter isn't handled properly, it can pollute nearby streams.
Litter stored in uncovered piles can wash off when it rains, filling streams with harmful bacteria. Litter that is spread too heavily on crops for fertilizer can run off into streams, clogging them with nitrogen and phosphorous.
Some farmers, like Paul Homan, are fortunate.
Homan has 300 acres of pasture and hayfields on which he spreads most of the litter for fertilizer. He easily sells the rest to three nearby farmers, who also use it to fertilizer their fields. He owns a $14,000 shed where he can store the litter if the weather isn't right for spreading it on fields.
Most poultry farmers in the Potomac Valley aren't as well equipped.
Only one-quarter of the farmers have plans in place and facilities built to properly dispose of their chicken waste, according to the U.S. Department of Agriculture. One-third simply dump the waste in uncovered piles, where rain easily carries it into streams, according to a state survey.
Federal and state agriculture officials are encouraging poultry farmers to voluntarily clean up their act.
Taxpayers will pick up most of the tab. It's not cheap.
A typical chicken manure shed can cost $20,000 or more. A dead bird composter costs $4,000. Federal agriculture officials say to clean up the Potomac Valley, 270 manure sheds and 200 bird composters need to be built. The total price tag is $6.2 million, not including the additional costs of poultry waste disposal plans. In all, the NRCS says the total project costs more than $7 million.
At the urging of Sen. Robert C. Byrd, D-W.Va., Congress gave the USDA more than $4 million over the last two years to help farmers write manure disposal plans and provide half of the money to build waste storage structures.
The state agriculture department will pick up the cost of another 10 percent of construction costs. Even the state Division of Environmental Protection chipped in, with money to provide farmers low-interest loans for the rest.
State agriculture officials praise the arrangement.
"What we're talking about here is a protection of state water quality and a sharing of state economic resources to do that," said Lance Tabor, executive director of the state Soil Conservation Agency. "It's just as we've done with a lot of other industries."
In Virginia, where local laws require it, WLR makes the growers who raise company birds develop proper manure management plans. Since coming to West Virginia a decade ago, WLR never required such plans of growers here.
"That's not really our style," company spokeswoman Gail Price said in August.
Two weeks later, in early September, WLR announced that it would require all its contract farmers to have manure disposal plans in place by the end of 1998.
"As of right now, there are no such requirements for plans to be in place in West Virginia," the company said in a series of newspaper advertisements. "But we don't want to wait any longer."
In a written response to Gazette questions, Price said WLR will offer farmers technical assistance to write their plans.
WLR won't give farmers any money to help pay for litter storage sheds or dead bird composters. The company won't pay farmers more to raise birds, so they can offset additional environmental protection costs.
"They're making a commitment in terms of education and trying to make sure their growers know the need to comply," said Ed Kesecker, a federal conservation officer in Moorefield.
"They have in recent years put forth the effort to make their farmers aware of the problems," he said. "But in terms of financial assistance to growers, I just don't know of any. That's been the missing link."
Price said last week that WLR doesn't own the manure its chickens produce.
"It's the same as we don't own their tractor or their house or their hiking boots," she said.
In a June 1996 report, the USDA criticized the way vertical integration of agriculture allows companies like WLR to avoid any financial responsibility for animal waste disposal.
The report concluded that large companies that process poultry, hogs and other livestock "could not compete if they had to pay for the social costs they generate."
"Neighbors, instead, must pay for those costs, and their anger at that burden is a threat to all producers," the report said. "Indeed, other countries have made their producers address the odor and water pollution problems, which is one reason why their stated cost of production exceeds that of their American counterparts."
Groups that speak up for poultry growers agree.
"Although growers never own the feed the chickens eat or the chickens they produce for the poultry companies, somehow they have become the owners of the manure and dead chickens," Morison wrote in August.
"There is one possible solution left - a loud knock on the front door of corporate headquarters. When they answer, just ask if the birds belong to them and would they mind cleaning up after them."
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