Co-op Development Action

AREC strives to help struggling
poultry producers

By Sarah M. Pike
Common Enterprise
Development Corporation

he Arkansas Rural Enterprise Center (AREC) has been working with local and regional poultry producers for the past five years, offering training and technical assistance that is helping put money back into farmersí pockets. While costs have been lowered ó most significantly through biomass innovations ó AREC is now tackling the latest hurdle for the poultry producers: a loss of poultry-production facilities in the area.

Cutting costs with
innovation

A combination of rising feed costs, slowing demand and over-production is buffeting poultry processors and growers nationally. Prices for corn and soybeans, the primary sources of chicken feed, have reached record highs. Processors and growers are also paying more for fuel and electricity.

Consumers are also dining out less often, especially at casual sit-down restaurants, where chicken is a menu staple. Sales to supermarkets and other retailers have not grown enough to offset the lost restaurant business, experts say. That has led to an oversupply of chicken, keeping prices low and preventing processors from raising prices to cover their added costs.

To combat the poultry producersí hurdles, AREC has assisted Poultry Partners Inc., a 400-member association and cooperative network of Arkansas, Missouri and Oklahoma poultry producers. AREC is helping members take an innovative look at how to create more efficient production methods.

One major initiative is examining heating costs and identifying lower-cost alternatives. AREC has put together a series of training sessions for Poultry Partners Inc. members on the economics of converting poultry houses from using fossil fuels to using biomass as a fuel source.

ďGiven the different resources available to each farmer, AREC did not focus on one source of biomass but on several, from corn to wood pellets and everything in between,Ē explains Donna Uptagrafft, program officer with AREC.

The results of their findings can be found in the publication: ďA Review of Biomass Furnaces for Heating Poultry Houses.Ē A link to the publication on ARECís website is www.winrock programs.org/Arkansas-agriculturaldevelopment/.

Al and Bev Saunders are poultry producers who benefited from AREC technical assistance. The Saundersí chicken farm near the Arkansas- Oklahoma border takes advantage of new technology as it becomes available. The couple is currently testing woodburning stoves to determine their effect on energy savings for their houses.

AREC was able to assist Poultry Partners Inc. through previous funding received from USDA Rural Developmentís Rural Cooperative Development Grant (RCDG) Program. The annual RCDG Program provides critical funding to co-op and rural developers throughout the country.

Although AREC did not receive RCDG funding for 2010, the cooperative development center continues its work with the poultry producers and other rural development projects as much as possible, including responding to a recent request from poultry farmers in south Arkansas who have experienced an even greater challenge.

Next hurdle
In 2009, Pilgrimís Pride, the largest chicken producer in the United States, idled three facilities, two in Arkansas and one in Louisiana, stopping production indefinitely.

One of the three facilities Pilgrimís Pride shut down was located in El Dorado, Ark. The result was that more than 120 Arkansas poultry farmers lost their primary buyer. Most producers did not get contracts with other poultry companies. As a result, millions of dollars in farm loans remain with no income to service the debt.

AREC was invited to assist Arkansas poultry producers in rebuilding their businesses. With the El Dorado poultry processing plant still dormant, AREC is working with 40 poultry producers and local entities to examine the feasibility of creating a processing co-op. The feasibility study is in the preliminary stages and will also examine the role of a cooperative in purchasing inputs.

The poultry producer projects are just one area of ARECís work that establishes economic sustainability in rural America. AREC is part of Winrock International, a nonprofit that works to empower the disadvantaged, increase economic opportunity and sustain natural resources.

AREC is also a member of CooperationWorks! (CW), a service cooperative consisting of about 50 cooperative developers from across the United States. These members represent 17 cooperative development centers, along with several other organizations and individuals.

For more information about AREC and its projects, contact Donna Uptagrafft at 501-280-3078 or duptagrafft@winrock.org. For more information on CW, call 800-600-7682 or e-mail info@ cooperationworks.coop.




March/April Table of Contents