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"Hectare is equal to 2.47 acres or 0.00386 square miles.

"Hectare is equal to 2.47 acres or 0.00386 square miles.

slaughtered worldwide, and a continuous increase is predicted for the foreseeable future (Table 7). To process this huge number of birds, fast and highly automated processing lines have been developed. A modern plant that can process up to 3.5 million birds per week is the new standard for the industry. This plant can also further process the broilers by cutting up the whole bird into four or eight pieces and reassembling the pieces back into a cut-up whole chicken. Because many of today's consumers prefer specific parts, the modern plant provides a large selection of fresh or cooked products. This significantly increases its profit margins. The plant also performs a retail packaging service to individual supermarket chains that includes printing the chain's specific prices for that week on each package. This enables retail markets to reduce or even eliminate from their meat departments butchers who used to perform the same job manually and at higher cost. This has made retail meat departments more profitable.

In comparison, the standard size of a processing plant during the 1960s that produced mostly ice-packaged whole birds was 50,000 birds per day. This type of plant and smaller ones still operate around the world in areas with lesser chicken production. To supply a processing plant with capacity of 3.5 million birds per week without interruption requires a complicated infrastructure. This includes parent breeder farms, hatcheries, broiler production barns, feed storage and feed mills, railroad access, and a transportation fleet. Railroad access is needed as major feed ingredients are purchased by trainload. The transportation fleet moves fertile eggs, chicks, and market-ready broilers from one facility to another as well as distributes the finished products to retail, fast-food, and institutional distribution centers and warehouses, from which they are distributed to stores.

As environmental-control parameters tighten, waste management becomes a high-priority consideration. This includes manure handling, wastewater treatment of effluents from production and processing, dead birds, hatcheries refuse, feathers and other unwanted biological materials, and odor control. Food-safety programs to control the growth and spread of pathogens are also addressed. In recent years, the detection of human pathogens in finished products has resulted in painfully expensive major product recalls. When food poisoning outbreaks have occurred, recall costs, penalties, and lawsuit judgments run in some cases to hundreds of millions of dollars. In recent years, plant closures, bankruptcies, and the sale of an entire company have occurred in the United States.

Table 7. World and Continent Production of Chicken Meat (1997)

Quantity (metric tons)

World 51,645,000

Asia 17,300,000

North and Central America 15,546,000

Europe 8,750,000

South America 7,206,000

Africa 2,240,000

Oceania 603,000

The coordination of all poultry production and processing activities is of highest priority in that plant downtime (being idle) or operation at less than full capacity is extremely expensive. The only way to strictly control and coordinate these complicated operations is by vertically integrating most aspects of the business. This requires a large capital investment. In 1900 5 million chicken farmers were reported and registered in the United States (minimum of 300 chickens). In 1998 only 341 egg producers (minimum of 70,000 hens) and several thousand broiler farmers remained. Clearly the poultry industry is becoming highly concentrated in the United States. The 50 largest companies produce 99% of all broilers, the 10 largest produce 66% of all broilers, and the largest company (Tyson) produces and processes 25% of all broilers. Most of the small broiler farmers became contract growers associated with integrated meat companies.

The disappearance of the majority of the small processing plants caused the broiler farmers that remained in the business to lose their independence. Today, many broiler-production facilities are under contract to the poultry meat companies. The company usually provides the farmers with chicks, feed, and veterinary and nutritional services. The farmer provides the labor, buildings, equipment, litter, light, heat, and water. The farmer is paid by the pound of live weight produced and gets a premium for better-performing flocks. There are few meat companies in each region, so the farmer has limited contract options.

As profit margins have narrowed during the years, larger production units have become vital. However, economical expansion or renovation is strongly related to interest rates. In many countries chronic high interest rates limit potential growth. Financing the expansion from profits and from depreciation has proved to be too slow a response in the poultry business. The low interest rates in effect since the late 1980s have fueled the dramatic expansion and the further concentration of the American broiler industry.

Producers of specialty birds such as Poussin (young spring chicken), petit poulet, the oriental black chicken, and others, or those providing live poultry for oriental markets are the last stronghold of the independent producers in that they do not depend on the large processing plants to take their birds. They produce low volume at higher prices in a family-style operation. In most parts of the world the poultry industry is less concentrated and the market is more regulated than in the United States, and producers there enjoy more freedom of choice and better returns. However, regulated markets generally need protection from lower-cost imports. According to the General Agreement on Tariffs and Trade (GATT), trade barriers for poultry meat and eggs should be removed by 2005. This is creating a lot of political and social concern in countries like France, Poland, Canada, and others where small farms are still common.

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