Live from the International Poultry Expo
January 29, 2009
Wednesday IPE Education Program wrap-upAttendees and exhibitors at the International Poultry Expo 2009 were treated to an informative duet of presentations Thursday morning, highlighting many of the challenges that poultry processors face in the industry today.
Tom Hensley, president of Fieldale Farms, was the main draw of the two-hour program, and offered his executive take on the poultry industry’s outlook for the near term, in a presentation titled, “Industry Outlook: An Executive Management Perspective.”
He offered a “best of times, worst of times” comparison between a wide variety of statistical indicators from June 2004 and November 2008.
In June 2004, the top 25 poultry companies turned a profit in the preceding 12 months, whereas, in November 2008, for the preceding year, only two companies of 22 recorded turned a profit. Average profit was 14.53 cents/lb. in June 2004 but plummeted to a loss of 6.87 cents/lb. in November 2008. He cited Agri-Stats and FC Stone on the majority of these statistics.
Hensley pointed out that the value per pound on most products, with the exception of wings, had also fallen off in that time. Boneless breast meat, for example, fell from around $2.50 per pound in June 2004 down to about $1.00 per pound.
“That’s our best product having lost about 60 percent of its value in that time span, which is just terrible,” Hensley said. Highlighting one of the roots of the problem, Hensley pointed out that corn growers were getting far less per acre, roughly $300 an acre in 2004 compared to $634 per acre in 2008. Yet, Hensley said, the latest reports estimate that at the end of this crop year, there would be $2.2 billion bushels of corn in storage, the highest in 20 years.
“There is no reason for corn to be $4 per bushel; no reason for it,” he added. Energy prices also have clobbered the industry, of course.
Despite the gloomy-sounding numbers, his overall message was one of hope, given the cyclical nature of the business, coupled with low interest rates, a lack of inflation and the general feeling that most people in the nation are ready to help the economy rebound. He said he expected a bounce in the economy soon, and also predicted that the poultry industry could turn a profit of between three and five cents per pound this year.
Preceding Hensley was Jim Wimberly, senior principal at Wimberly, Lawson, Steckel, Schneider & Stine, PC. Wimberly offered suggestions and solutions geared toward solving the maze of issues facing employers in “Current Trends in Employment Law and Labor Relations.”
A majority of Wimberly’s talk centered around immigration and the questions employers have in the ever-changing fight to make sure their workforce is legal. He offered tips to processors on how to handle immigration and other labor issue topics.
Wimberly’s personal prediction for the near future was that, Immigrations and Customs Enforcement (ICE) would likely ease off the throttle on raids and increase its focus on I-9 audits and other such measures. He explained that ICE raids such as the raid on Postville, Iowa, processors Agri-Processors, resulted in a tidal wave of negative criticism in the media across the country.
Wimberly also noted that ICE raids cost the organization more money than simple audits and spreads the organization’s resources thin.