Delmarva chicken production rebounds despite workforce struggles
GEORGETOWN — The Delmarva poultry industry’s value rebounded and grew 25% last year, but labor shortages have pressed Delaware’s chicken processing plants to return to previous levels of production.
The Delmarva Chicken Association (DCA) recently released its year-end report that estimates a $4.2 billion industry profit from wholesale chicken sales in 2021. As the state and the rest of the nation reopened for business, demand soared for chicken in grocery stores and in restaurants.
But farmers raised 567 million chickens, 3 million less from 2020. Processors produced 4.2 billion pounds of shelf- and table-ready chicken, again continuing the trend of a slight drop from the year before.
Income for chicken “growers,” or those who raise chickens, earned $278 million in contracts in 2021. Adjusting for inflation, that is nearly a 19% increase compared to what growers earned a decade ago. But accounting for turnover in chicken processing plants due to the “Great Resignation,” companies had to slow chick placement due to constraints at processing companies.
All these factors — including the 3 million less chickens processed compared to 2020 — DCA spokesman James Fisher attributes to the worker retention struggles that chicken processors have been dealing with. Mountaire, Perdue and Allen Harim are among Sussex County’s top 10 employers, with a combined 9,083 employees in 2020, according to Delaware Business Times records.
Combined with Maryland’s and Virginia’s Eastern Shore locations, the chicken industry had 17,739 employees by the end of 2021. Despite turnover, the DCA report shows that the number has stayed even from 2020.
“Much like every industry, there were struggles in keeping employees. It wasn’t the case for every chicken processor, but there were times they may have been operating at a lower capacity than they would have liked,” Fisher told DBT. “That’s why if you take a drive through Sussex, you see all these billboards listing benefits and wages.”
Billboard advertisements list wages between $15 and $19 per hour, and Fisher notes that some chicken processing companies are becoming creative in benefits. Some may be adjusting their pay schedule on a weekly basis rather than bi-monthly, he noted. In addition, many of these companies offer a health care plan as well as a doctor on premises.
Employees in those poultry processing plants earned $803 million in wages, excluding benefits, which is a 8% jump from the previous year, reflecting the change in the labor market. But inflation is also hitting Delaware’s chicken companies hard. The industry spent $1.3 billion collectively on feed ingredients, nearly a 30% increase from 2021.
“Those are the main challenges the chicken industry is facing: labor and inflation,” Fisher said. “It’s always going to be the focus on how to provide an affordable meal, whether you’re cooking it at home or ordering out.”
Avian influenza was another struggle that chicken growers had to contend with in the past couple months, as two farms in Delaware reported cases of the highly infectious respiratory virus. While the flu is not dangerous to poultry meat and eggs, growers had to depopulate their flocks. Fisher said there have been one other case in Maryland, but none since.
“Our members faced uncommon challenges in 2021, including continued pressures from COVID-19, labor shortages and increasing input costs,” DCA Executive Director Holly Porter said in a statement. “Today, we face additional challenges, like highly pathogenic avian influenza, and inflation, which raises costs borne by chicken growers, chicken companies and the industry’s allied businesses. Now more than ever, it’s important we all recognize the contributions of this crucial economic sector on Delmarva.”
The DCA report also shows the pool of chicken farmers continues to stay small, as there were 1,361 chicken growers in 2021. It’s 45% less than it was 20 years ago. But as Sussex County becomes a popular place to build homes, it’s expected that the industry will continue to “do more with less,” Fisher said.