Chicken farming is one of the biggest food industries in North America with the

population of the United States consuming an estimated 180 million chickens a week and reeling

in an estimated $90 billion annually according poultry data supplied by the United States

department of agriculture data and the National Chicken Council for the entire year of 2015.

Akin to other major farming industries, this level of production comes at a cost that is bared to a

greater extent by the farmers who raise the chickens. The problems that this document will

discuss in detail will cover the high startup costs, competition from other farmers, the threat that

diseases poses on the livelihood of these farmers, as well as how regulation affecting economies

of scale can affect the small scale chicken farmer.

According to the National Chicken Council, approximately thirty-five companies in the

United States control the chicken farming industry with Perdue, Pilgrims, Sandersons Farms

and Tyson being the major players in the broiler industry. Under these companies are an

estimated 25,000 family farmers that operate as contract farmers with the companies exercising

control over the raising, processing and marketing of chickens in a way that gives the company

the ability to ensure that the chickens are up to their quality assurance standards during every

step of the process. Most of the farmers who sign up to be contract farmers are from poor

background and lack the capital to independently run their own chicken farm profitably. The

companies provide the chickens and feed while the farmers take care of sourcing and

maintaining the infrastructure. Ideally, this could have been a great situation that benefits the

farmers and the companies equally but this has unfortunately led to profits only going one way

and the famers having to deal with the consequences of the unsavory business practices of the

companies. As a way to incentivize the production of high quality chicken without intrusive
monitoring, contract farming companies pit farmers against each other in a sort of tournament

whereby the farmers with the best chickens are paid up to 50 percent more, per pound, per

chicken delivered than the lower performing farmers. In some instances, poor results lead to the

farmer being penalized. Economically, this creates the best possible product for the company and

leads to larger profits but this has devastating social consequences. As most of the farmers in this

contract farming scheme are from low income backgrounds and rely on bank loans to cover the

startup costs required to meet the company standards. After acquiring loans to abide by the

stipulations set by the companies, it is the responsibility of the farmer to finance the costs of the

general upkeep of the farm which includes repairs, new farming equipment and labor costs. This

leads to the farmers having to take out more loans on top of the ones they already have. This

means that for a family having a particularly bad year, penalties from the tournament could to

the family being unable to keep up with their loan payments and having to forfeit their property.

This has led to farmers losing their family homes and in particularly extreme cases, being driven

to commit suicide. The complete oversight that the contract farming companies have means that

a farmer will have no say in in the ethical treatment of farmers which creates an unenjoyable

work environment for the farmers who are powerless to improve the short lives of their chickens.

This piles on a more depressing narrative on an already dire situation for chicken farmers.

Chicken farmers also fall prey to natural disasters. In 2015, Chicken farmers in the

Midwestern United States experienced the worst bird flu (H5N2) outbreak in history. This led to

the euthanasia of over 48.1 million birds between January and July. Considering that contract

chicken farmers account for a large majority of chicken farmers, it is more than safe to assume

that they bore the brunt of much of what is estimated to be over $1.51 billion dollars in dead

poultry and other economic losses in Iowa alone. The effects of this echoed beyond the
Midwestern United States with 40 countries placing bans or restrictions on all American poultry

creating economic hardships for farmers whose birds were completely healthy and unaffected by

the virus. This was not an isolated event, with the Center of Disease Control (CDC) at least eight

other such outbreak occurring between 1997 and 2015. This means that at any point, the

livelihoods of chicken farmers could be at risk.

An alternative to contract farming is small scale free range farming. The market for free

range chickens has been on the rise recently due to favorable public opinion and gives farmers

more freedom in their interaction with their livestock. However, this does not mean that they are

immune to regulation. Small scale chicken farmers in Burlington, Ontario are limited to fewer

than 300 birds even though the economies of scale require at least 1000 birds for the farm to be a

profitable enterprise. Regulations also dictate that the chickens can only be slaughtered at a

provincially inspected abattoir, which adds transportation costs on top of the costs of labor and

general farm upkeep.

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