July 18, 2011
by Alicia Karapetian and Bryan Salvage
Tornadoes, floods, drought and wildfires have resulted in devastation for parts of the US meat and poultry industry. Inclement weather has affected livestock and meat production at all levels. Meat&Poultry investigates the impact these events have had on the industry and how the industry has responded to those who were in need.
When more than 67 tornadoes ripped through Alabama on April 27, 238 people lost their lives and thousands of homes and businesses were destroyed, according to the Alabama Emergency Management Association. The tragic loss of lives serves as a reminder of nature’s power. Nature’s fury didn’t spare the poultry industry in Alabama, the nation’s No. 2 producing state.
An estimated 3 million birds were lost. However, considering the state processes 4 million birds per day, that loss was not as great as other effects, according to Ray Hilburn, membership director at the Alabama Poultry and Egg Association. The larger issue, he says, was that 210 poultry houses were destroyed and 500 houses had moderate to severe damage. “We had 12 poultry complexes affected,” Hilburn says.
Corporate offices of processing companies were also damaged or destroyed, including the Tuscaloosa headquarters of R.L. Zeigler Packing Co., a sausage, hot dog and bacon processor. Tuscaloosa County was the hardest hit by the storm, bearing the brunt of the wreckage and the fatalities. R.L. Zeigler leased temporary space in a nearby town while working with its insurer to rebuild either at the old site or elsewhere in Tuscaloosa, according to local media reports. Its processing facility in Selma was unaffected.
Other facilities were not as lucky, including Peco Foods’ Tuscaloosa facility, which was heavily damaged, while many others, such as those owned by Oakwood, Ga.-based Wayne Farms LLC, were without power for a lengthy period of time. “The four Wayne Farms processing facilities located in Decatur and Albertville, Ala., were undamaged but idled for seven days due to widespread power outages in the area,” says John Flood, Wayne Farms vice president and general manager for the further-processing business unit.
That seven-day period after the storms was a difficult time, Hilburn adds. “There was no phone service [in northern Alabama], and companies’ couldn’t reach their growers and it was hard to get in touch with people,” he says. “It took seven to 10 days to gather up to know who had what damage…So many roads were closed because of down trees and people couldn’t get to the farms if they had to haul feed.”
Hauling feed to farms became a necessity for many to stave off further bird losses, as companies’ feed mills were damaged or lost power. Though Hilburn says that ensuring feed bins are full in advance of a storm to weigh them down is part of preparing for any severe weather threat, those efforts could help this time around because the tornadoes, “tore everything up,” he says. “We’ve never seen anything this devastating.”
To make matters worse, fuel was in short supply and many farms were running on generators. “Some of these generators ran seven to eight days and they gave us trouble because they’re not designed to run for days, only a few hours,” says Hilburn. However, Tyson Foods was able to secure diesel fuel and had their growers – those who were able to navigate the closed roads and downed limbs – come pick up fuel at a local processing plant.
In the end, Hilburn says, the value of the storm damage will likely reach $27 million for damage to houses, poultry houses destroyed and the value of birds lost. While Alabama has $2 billion in farm receipts annually, and the economic impact of the poultry industry in the state is approximately $10 billion, the amount is still significant. Facing devastation
While the total financial impact on the industry may not be directly affecting chicken prices, Hilburn notes, it’s devastating for “the individual growers who lost their farms.”
Many older growers, he says, built their houses for less than $200,000 and for most, it would cost twice that to rebuild. “Growers don’t want to go into debt,” he says. “If they can’t go to [their] insurance, some probably won’t rebuild.”
To that end, Wayne Farms’ Flood estimates, “It may take up to a year to weather the full effects of the storm, particularly in the grower operations.” Some 106 chicken houses in Wayne Farms’ group of growers incurred what Flood calls “minor to significant” damage and 30 were either destroyed or sustained such severe damage that they were taken out of service. In the meantime, he says, “The production output of the lost houses has been absorbed throughout Wayne Farms’ total network of chicken houses,” while the others are repaired or replaced.
Wayne Farms was able to limit interruptions to their customers by filling orders through existing inventory or through other facilities not impacted by the tornadoes. “Shortages were minimized,” he says, “and within several weeks we were back to our normal service levels.”
While speaking at the Jeffries 2011 Global Consumer Conference in Nantucket, Mass., in late June, Pilgrim’s Pride President and Chief Executive Bill Lovette credited the company’s geographic diversity for keeping operations as normal as possible in the storm’s aftermath. “Even though we had some damage at our operations in Alabama,” he said, “we didn’t miss a beat in terms of servicing our customers from other locations.”
The aftermath has been trying for poultry industry members in Alabama, however. Two of Wayne Farms’ contract growers were among those who lost their lives during the storm, and helping those affected has been a big focus. Wayne Farms created a tornado relief fund, which has amassed more than $75,000 from employees, suppliers and others to help those in need. The Alabama Poultry and Egg Association established a similar fund to assist poultry producers with personal losses for homes and vehicles. More than $110,000 was collect by late June, at which time Hilburn began handing out checks. The Farm Service’s Livestock Indemnity Program covers lost birds, and money was available from the government to assist with clean-up efforts. Hilburn hopes the collected funds will provide a good starting point for producers to get their feet back on the ground in the wake of the disaster and is thankful so many have donated to assist others.
“In these tough economic times,” he says, “it’s amazing how many poultry companies and allied industry members and how many growers have sent in contributions to help their fellow man.” Beef and pork trials
Floods and wet, cold spring weather in the North Central region and mid-Mississippi River drainage areas have stymied corn planting and other field activities, raising concerns about availability and prices of feed grains in 2012. This cold weather also dampened meat demand for outdoor grilling. Deadly tornadoes, droughts and wildfires have also been devastating to the red meat industry.
“This year’s weather thus far is most certainly unusual,” says David Salmon, meteorologist and president of commodity weather consultation business Weather Derivatives, Belton, Mo. “The expanse of the extremes as well as the values, and the sharp contrast in extremes [wet/dry] make this year stand out from other years.”
Texas’ beef industry has been hard hit. With the exception of far northeast Texas, the entire state is in the throes of a drought that has Texans trying to remember how bad it was in the 1950s, says Jim Sartwelle III, director of public policy with the Texas Farm Bureau. Texans are no strangers to weather disasters. In 2008, agricultural losses in Texas totaled $1.4 billion, and an additional $3.6 billion in 2009.
Agricultural losses from its statewide drought conditions are projected to reach $1.2 billion and could be higher than that, based on data from Texas AgriLive Extension economists. “Texas is the largest beef cow-producing state in the US with more than 5 million head,” says Dr. David Anderson, Texas AgriLife Extension livestock economist. “More than 90 percent of the state’s beef cows are located in counties categorized as being in severe to exceptional drought.”
Cowherd liquidation is in full force over most of the state, Sartwelle says. “According to the Texas Agricultural Statistics Service for the week of June 13-19, 83 percent of Texas range and pasture was rated in Poor or Very Poor condition [only 4 percent Good and 13 percent Fair],” he adds. “Hay is in pretty short supply, feed is high, stock tanks are running low and lots of folks are selling out rather than feed and/or haul water.
“We have not been ‘fully stocked’ in most traditional cow-calf areas of the state for more than a decade,” he continues. “Recent weather reports indicated it might be the fall before producers can expect some relief. If that holds true, we will continue to see lots of cows come to town.”
Wildfires have also been very damaging. Texas has lost thousands of miles of fence on its more than 3 million burned acres, thousands of stored hay bales and all the forage in the affected areas, Sartwelle says. “We have had amazingly few head of livestock lost to the fires [partly due the persistent drought that has kept us far below ‘normal’ stocking rates in many areas].” Pork industry fares better
The US pork industry has not been impacted as badly by this year’s extreme weather, claims Steve Meyer, Ph.D., president of Paragon Economics Inc. and consultant for the National Pork Board and National Pork Producers Council. “There was some production facility damage in that first big group of tornados that went through North Carolina and a few production facilities damaged in northwest Iowa,” he says. “But there aren’t a lot of hogs around Joplin, Mo., where that devastating tornado hit. There’s a large hog unit in Nevada, Mo., but it came through OK.”
Regarding ongoing flooding, disruptions of logistics have impacted the pork or beef industries but not badly, he says. “Flooding had Interstate 29 closed first in northwest Iowa and more recently in southwest Iowa and parts of Missouri...that probably had some impact logistically. It could have some impact on the St. Joseph, Mo., [Triumph Foods Inc.] pork plant, we’ll see how that works out as the water gets that far south.”
How inclement weather will impact future feed supply and prices has far more potential for economic impact on the pork industry because it would affect 100 million pigs produced in the US, Meyer says.
Officials with Smithfield Foods say operations in North Carolina were damaged by a storm system on April 16 that produced an estimated 200 tornadoes across 13 states, claiming the lives of more than 40 people. More than half of these fatalities occurred throughout 18 North Carolina counties, where hundreds more reported damage ranging from downed trees to complete home loss.
Murphy-Brown, the hog production subsidiary of Smithfield Foods, incurred extensive damage to one company-owned finishing farm, two contract nurseries and one contract finishing farm when a funnel touched down in Northern Bladen County, NC, says Don Butler, director of government relations with Murphy-Brown.
While the Bruce Butler nursery contract farm was able to relocate and save 3,400 animals while losing just 20 pigs, the company-owned Foxfire finishing farm lost 400 hogs, suffered complete destruction of four hog houses and further damage to small offices and outbuildings near those houses. Foxfire endured a direct hit. The Twisted Hickory nursery and Stony Fork Farm near Pink Hill also experienced structural damage, Butler says.
Several Tyson Foods plants experienced several days of down time due to flooding in Mississippi and Missouri. “Our northern Alabama plants were down a short time due to disruption of electric service caused by tornadoes and we closed our Dakota City, Neb., beef plant for two days so our team members could prepare for flooding,” says Worth Sparkman, spokesman with Tyson Foods. “A few of our poultry farmers had houses that were destroyed by tornadoes, but it was a very small percentage of our overall business. We helped those farmers recover and relocate their flocks. As far as we are aware, none of our family farmers were affected directly by flooding or fire.”
“I have not heard of much in the way of problems other than at our Nebraska City, Neb., value-added meats facility in,” Mike Martin, Cargill director of communications, tells Meat&Poultry regarding weather damage at his company’s beef and pork operations. “That involved employee homes being flooded and roads being closed and restricting access to the facility, but not problems at the actual facility.” What’s going on?
Opinions differ widely among weather experts as to what’s behind these weather disasters, but meteorologist Salmon’s opinion is unwavering. “Ultimately, these events are being pushed by a warmer planet and the warmer planet is a result of human activity, be that deforestation, other de-vegetation, increased carbon dioxide, soot in the arctic and most importantly what our collective activities have done to the oceans,” Salmon insists.
When asked if global warming is totally man’s doing or merely a continuation of nature’s never-ending ebb-and-flow pattern of going back and forth from warmer to colder temperatures, Salmon responds, “We will not know the answer to that with complete certainty until decades from now, but all of these events are lining up with the predicted consequences of a warmer world. The weather machine is a steam turbine. The tropical oceans are the boiler, the poles are the condenser and the jet stream is the turbine. Add energy to the steam engine and the turbine cranks up faster. A faster jet stream will tend to lock into more persistent seasonal patterns and yield greater extremes in local and regional weather.” Lending a hand
Meat and poultry companies have pitched in to aid thousands of Americans who have suffered at the hands of Mother Nature this year. Tyson Foods donated more than 270,000 lbs. of food in the Southeast as part of disaster relief efforts in several states ravaged by tornadoes and storms.
For weeks, six Tyson cooking teams were stationed in northern Alabama to help feed disaster relief workers as well as employees, contract poultry growers and local residents who have been affected by storms in that area. In addition to delivering four truckloads of meat, poultry and tortillas, the company also delivered ice and 27,000 bottles of water.
Tyson also donated a truckload of chicken and a truckload of tortillas in central North Carolina to the American Red Cross, The Salvation Army and the Christian United Outreach Center to help with relief efforts. Thousands of North Carolina residents were recently affected by tornadoes, including people in Sanford, where Tyson operates a tortilla plant. Tyson’s Sanford facility was not damaged; but a tornado touched down nearby. Plant employees raised $1,750 and donated clothing and household items to help a co-worker whose home was destroyed in the storm.
Tyson additionally shipped a truckload of food to the Arkansas Food Bank Network of Little Rock after tornadoes hit that central region of the state.
Iowa was also recently endured tornado damage. Employees of Tyson Fresh Meats in Dakota Dunes, SD, and in Storm Lake, Iowa, collected more than $2,000 to help with disaster relief there. Most of the money was donated to the Siouxland Area Chapter of the American Red Cross, some was used to support employees who experienced storm damage and other funds went to help feed relief workers who were removing debris from farm fields. Ground beef was donated to two local food pantries.
Food, ice and cooking teams were sent by Tyson Foods to Joplin, Mo., and Reading, Kan., to help in the aftermath of deadly tornadoes that hit both communities in May.
Cooking teams from six Tyson plant locations traveled to Joplin. This town was devastated on May 22 when an EF5 multiple-vortex tornado that officials reported killed 156 people and destroyed many homes and businesses.
Tyson plants involved in many relief efforts are located in Sedalia, Noel and Monett, Mo., and Berryville, Clarksville and Rogers, Ark. These facilities also sent nurses to Joplin, because the Joplin hospital was severely damaged and a request was made for additional medical assistance.
Tyson Foods’ Emporia, Kan., specialty meats plant sent a cooking team to Reading, Kan., where a tornado hit, killing one person and destroying approximately 20 homes. At least five Tyson employees who work at the Emporia plant live in or near Reading, in east-central Kansas. Some sustained damage to their homes; however, none were injured.
“We also donated food, fuel and cook teams’ time to flood relief efforts in Vicksburg, Miss., and the Dakota Dunes, SD, area,” says Tyson’s Sparkman.
Hormel Foods Corporation donated 55,000 Hormel Compleats microwave meals to a Feeding America food bank to aid in relief efforts for Joplin. It also donated three semi-trailer loads of Hormel Compleats microwave meals to Feeding America food banks to aid in relief efforts for Alabama and the southeastern US impacted by the April 27 tornadoes.
In an effort to aid Bladen County, NC, residents, Smithfield Foods contributed $100,000 to Bladen Baptist Association for use by those who experienced partial or total home loss and are without insurance.
Smithfield Foods and its Missouri operating companies also helped neighbors in need after the Joplin tornado, says Dennis Treacy, senior vice president, corporate affairs and chief sustainability officer. Farmland Foods teamed up with Walmart to provide 500 gift cards worth $50 each to Joplin families. Farmland also donated $15,000 to the American Red Cross to support its efforts in Joplin.
Murphy-Brown provided two pallets of food supplies to Joplin families and the company’s employees cooked 1,000 pork burgers donated by the Missouri Pork Producers Association to feed emergency personnel and volunteers. It also donated $1,500 to the American Red Cross, $1,500 to the Joplin Area YMCA for its Childcare Relief Fund and $2,000 for supplies and food for volunteer work groups.
Premium Standard Farms donated pork to a local grassroots organization that sent volunteers to the area to cook for residents, and volunteers from the company are planning to support further cleanup efforts. A truckload of meat products donated by Smithfield Packing arrived in Joplin on June 17.
Countless other meat, poultry and allied businesses donated their time, services and supplies to those in need who will never forget these acts of kindness nor the terrifying events that changed their lives forever.