NFO-254 (AV10757): US Farm Report: The Broiler Producers Dilemma - Part 2

[music] hi everybody and welcome to us farm report this week part 2 of the plight of the broiler producer US farm report crew members were in Cullman Alabama to record this story Cullman Alabama ranks number four in all the nation in broiler production the state of Alabama is third in broiler production behind only the states of Arkansas and Georgia from the standpoint of agricultural income the county of Cullman in Alabama ranks in the top 100 agricultural counties in all the nation my first guest on US farm report was mr. Kyle Smith a broiler producer and dairymen from the Cullman area pal 12 years ago at two and a half cents were you making a living in the broiler business oh yes you was making some money there yes you could pay your expenses laboring, light bills and your heating bills you repairs and you could come out what we thought we could come out we wouldn't take in depreciation on buildings and equipment yeah well now you fellows have the feeling do you not that if your price should increase to three cents that this would turn it that this would allow you to make a living once again we think that it would put us back about what we was 12 year ago well in other words what I'm trying to do and I certainly don't mean to imply that I'm an economist and I know that you're not either but I'm guessing and maybe you'll guess with me that two and a half cents in 1958 would buy well let me put it this way three cents today will probably buy about what two and a half cents would buy in 1950 yeah Kyle we have seen three of your broiler houses on film now you have altogether six right we have mentioned what you're doing with a couple your putting calves in one you have some horse stalls in another now when you had all six of these broiler houses going at the full blast what was your capacity for one grow out six to seven thousand did that figure out about what one bird per square foot I figured out about one four nine ten square foot and that's pretty close to a square right now how many grow outs does the broiler producer have in a season about four about for just about four yeah let's talk a little bit about the routine of you're doing business with the contractor what does he bring you he brings us feed and broilers and medication and then he expects you and returned to do what heat furnish labor and grow them at now have you kept any time cost accounting records on just exactly the time that you've invested in this broader business and how much money you get for your time and labor you don't get any money for your labor in town it just don't figure it now you mentioned heat you have a year-round job and the broiler business when it's going full and you have certainly to heat these broiler houses is the is the heat factor an expensive one it's very expensive what is it cost for example for one grow out in six broiler houses to heat them in the dead of winter time it'll cost three quarters to a cent a pound to furnish the heat yeah and in addition to that you have heated with coal and that represents a lot of hand labor right right let's go back to this two cent price that you fellas are getting today for these broilers and let's take that broiler from the time it leaves you and goes back to the producer and gets to the supermarket and to the consumer and talk about price you get two cents in the other ways approximately how much after six or eight weeks about three and a half pound and it is after six to eight weeks that the contractor comes and picks them up that's right so three and a half pounds means that you're getting six and a half cents perhaps on the average per bird about that that's about that's close to what do you suppose the contractor receives for that same bird net after he pays for the feed and after he pays for the processing I think that he'll make a dime a bird after he pays for all of it I think the processor makes more net then we make at all all right now when that same three and a half pound broiler gets to the supermarket and my wife or your wife goes in there to buy it what is she paying for it today she'll pay about a dollar and fifteen cents for a broiler in addition to a little break in price you fellas are also interested in some fringe benefits would you tell me about that yes we think they should help us on a condemned on the heat and on the letter here our production costs for you fellas that are rising day by day I presume litter costs considerably more than it did last year and will cost more next year than it does today bill letter cost twice two times as much as it did twelve year go down to get one house ready for shavings so you'd like for the contractor to provide you with the letter you'd like for him to provide you with heat right with the utilities that's right and you mentioned condemnation this is quite a factor in this business isn't it government in their sectors they have a hand in it would you explain to our viewers how this works they take these brothers to these plants and they run them and the condemned we lose all of that they sale the condemned we get nothing out of the condemned well now in case we have listening today and watching Kyle some urban dwellers who don't understand this business would you explain what a condemned bird is in terms of the broiler business a condemned bird is a bird that they say is not fit to sale not fit for human consumption and what happens to that bird they take it and put it into tankage and and reuse it how is it reuse cut and fade in other words there's a good possibility that out of your broiler house might come some condemned birds that might return to your broiler house by the contractor in the form of feed for your broiler right that's always a possibility is right well I think that you've pretty well outlined the problem and why the broiler industry is in the shape its in what do you think the broiler man can do to solve this problem Kyle I think we've got to have more money how do you suggest that that you fellas go about getting that done I think we should go through an elbow and heat it down now going through NFO and getting it done as you say I think perhaps can be boiled down to something rather simple and that is that you could hold square footage can rat I think we could hold it and when they start paying us enough to be a have a profit out of it we can comb the brothers then you can give them back the square footage again right to grow their broilers right yeah well Kyle although things have been bad for you as well as the other broiler producers in this county you do have something on the bright side in your farming operation and that's the fact that you run a dairy tell us about it well bill it's it's not on the bright side by far it's just a little brighter than abroad by comparison anything might be bright all right we are doing a little better in a dairy business than we are the broiler business how many how many cows are you milking about 225 and as yours a grade A operation grade a you know what what are they Holstein cows they are mostly Holsteins what about your replacement program you have a good calf the program going bill we raised all of our heifers out of our butter cows I see you know that is made a dairying a little better by being able to improve you know what kind of a milking parlor do you have you have the pit type I have a straight walk through parlor type how many cows is accommodate at one time ten cows comes through at a time you know we always like to talk to our NFO members about investment I think that many people don't realize the dollars that can be invested in farming operations that are invested in them now to get back to a subject you're not too happy about the broiler business you've had no small investment in these broiler houses and the equipment how much do you figure you had invested in it oh I've got around 25 to 30 thousand invest in the broiler business and what about your dairy operation what kind of an investment do you figure you have their car I have a much greater investment in my dairy operation yeah well I do what it amounts to dollar wise at around around $1,500 per cow per cow that's for the whole that's for the whole operation in other words we're talking now about your buildings your equipment the land and every cattle that's right ok Kyle thank you so much it's been great seeing you and you know this is my first trip to Alabama and I want you to know I'm enjoying it thank you bail in spite of the fact that Cullman County Alabama is among the top agricultural counties in all the nation the farms there are comparatively small very small indeed they average some 45 to 50 to 55 acres each by comparison our next guest on us farm report ET white is a farmer with a large operation ET farms some 450 acres in the Cullman area now let me ask you this et when you had all three of your broiler houses up and operating how much of an investment did you have in the broader business well I had insurance on the three projects for the total amount of $25,000 which in my judgment was considerably less than the real value of the replacement value I should think would be the way to figure wouldn't you that would be my thinking if I endeavored to continue in this operation of course I'd have to invest around fifteen thousand dollars to replace this house that burned and by those standards I could reasonably assume that I had around 45 thousand dollars invested in the three projects and then replacing the one that burned for fifteen thousand dollars you would be almost doubling the money that was paid to you by the insurance company for this loss right just about you know what sort of efforts ET has the Farm Bureau made through this area to try to bring about a turn upward in this a broiler problem well in my judgment Farm Bureau made a they made a effort all right and I'm sincere when I say that I think they made a sincere effort but in my judgment their approach was not the approach that bring any good results in that it's too far removed from the farmers themselves their program might work in some other fields of agriculture but the broiler industry is too far from the lawmakers in Washington or Montgomery or any of these lawmaking bodies they're not familiar enough with the problems abroad are going to come to our rescue and how long ago was it ET that you were attracted to and join the NFO I joined NFO in December 19 and 68 68 yes sir what has been the trend among your fellow Farm Bureau members through this area are they to joining NFO in addition to maintaining their membership and Farm Bureau in December 1968 I was a member of Farm Bureau and had gone to Farm Bureau broiler market meetings which I was a County representative at that time for Farm Bureau marker a broader market service and at that time I was growing some hogs for parking and I hauled my hogs at that time I hauled hogs to Tupelo Mississippi which is about 125 to 130 miles one way from my farm and by hauling hogs to Tupelo Mississippi by making sometimes three long-distance telephone calls to their buyer at the mid-south packing plant in Tupelo Mississippi and picking the high trend days on the market I could get us sometimes as much as 18 cents per pound for hogs and along about that time in the same December month that I joined NFO I carried hogs to Tupelo twice that month and these people NFO representatives told me that there was a possibility that we could get a NFO collection point in Alabama if we would support it I told him it sounded like a real good program to me and that I was for it and I joined NFO and to my pleasure in a few months and fo did make an effort and did establish a pickup point at Albertville Alabama on Sand Mountain about 50 miles from my home ET you're a good loyal Farm Bureau member have been as you said for many years do you see any conflict in the world any reason in the world why a Farm Bureau member can't recognizing the capabilities of NFO go ahead and join n fo retain his farm Bureau membership the insurance and all of those benefits well I've discussed this with some of my co-workers in Farm Bureau and some of the staff mmm and I made the remark to one of my good friends who is a staff member to Farm Bureau and I put it to him this way when he rather rebuked me for being an NFO member some months ago and I said well I'd rather have two friends any time than one good point next one and I have no qualms with Farm Bureau if they I have paid my broiler dues and if they have something that they think is will be an effective thing and can show me some results I'll go along with any program they can offer that can can better our situation that's all I'm really looking for certainly I think that's all any farmers looking yes that's true what do you think of the space holding action we're in right now for the broiler industry do you feel that this is the way to do it well apparently this is the only way there have been different approaches and then we've made numerous attempts to reckon with these people and try to point out to them our need for some consideration in this price squeeze thing and they have failed to recognize our have failed to respond I don't know which the program which the real issue is in their regard whether they have failed to recognize it or where they have failed to respond i'm i am led to believe that they have failed to respond i'm sure they're well aware and well the broiler that are addressed in this county and there's lots of them while of the market better to cook demand has steadily increased and ready to cook prices a steadily increased our all our price for producing these chickens has remained at a minimum and hasn't increased any to speak of we haven't we haven't made any gains at all matter of fact when you analyze this thing and see the high condemnation that they place against our birds when we get a final settlement we have gone backward actually backward you've lost money yes sir we realize less net return on a given thousand of birds now than we did two or three or five years ago when I five years ago when I first involved myself in this thing and at that time I've had less than 1% condemnation in 1969 I had as high as 15% condemnation and I can't see that is any any fault of my own because my practice was simply the same and I feel like that if the condemnation is going to be placed on me I should have some prerogative about what flock I placed with I have no choice about what flock I receive in my houses or what the background is of the disease problems with those breeder flocks and and but I am expected to suffer all the condemnation well if you get say a cent more per pound that would bring you to three cents a pound if you were to get some of the fringe benefits that are being discussed around this area it might turn the business to the profit side might it it's a must we must realize some profit out of this thing if we are to continue the most of the people that I talked to that are in the broiler business and have been in the broader business considered imperative that they do begin to realize some return on their investment and at least a fair wage for their endeavor let me ask you to tell our viewers the story you told me earlier today about a neighbor of yours who owned a few acres of land what he did with it and then what he in turn did with the money I think that this better tells the broiler situation story in this area than any story I've heard well it's a it's a very familiar story in my community here a lot of my neighbors could relate it to you probably as well or better than I can but this neighbor had about 200 acres of what we considered good productive farmland and of course the broiler industry this has been some 20 years ago and maybe not quite that long we would say in a range of 15 years but anyway he- the broiler industry we had begin to expanded that given time in this area a lot of new integrators had moved in and one or two individuals had involved themselves in broiler production this man decided that with labor shortage begin to appear on the local scene that he would be better equipped to sell his farm and buy a small tracking going the broiler production he did to my understanding he sold this 200 acre farm for around $18,000 thought of us thought that that was a fair price part and wondered how that one could get $18,000 for the farm incidentally he sold this farm to a lawyer in Atlanta Georgia and at that time I couldn't conceive why a man in profession would go and involve self with the farm but as time passed and this man took the $18,000 and bought a small tract of land built one broiler house and he related to me as how that he when he first started in the broiler production that he got as high as 150 dollars per thousand birds produced for a local integrator and he felt at first that he had made a right decision that he was on the right track but after he had produced for a few months or a few short years he found his prize for producing broilers begin to decline down to a hundred and twenty dollars two thousand down to a hundred dollars a thousand and he decided it that this had marred his income to the point where that he must do something else so he went and build another brought her house decided to get a little bigger and maybe have a little more production volume and get along so easy it he built another house and went along he was down to $80 a thousand and down to he told me he got his littlest sixty and fifty five dollars per thousand on those two houses and he finally built the third brought her house attempting to get efficiency attempting to get bigger and more efficient what seemed to be his reasonable approach well this man is retirement age now and has used up his energies of trying to recover from this thing that he involved himself in and incidentally this is lawyer that bought this property for eighteen thousand dollars ever did any improvement to it matter of fact the farmer went the other way the fences went down and the building's depreciated no repairs made 1969 this lawyer now and Atlanta sold this same farm to the state of Alabama for development and a state park for a one hundred thousand to my understanding how are you making a living in farming here on your acreage right now well of course we have to revise our plans as new scenes arise of course we have cattle on some of the acreage that we have heretofore row cropped and cotton and potatoes and of course we have forest land and oftentimes we find it necessary to go to the woods and harvest timber and of course we do sell some of the production of the cattle and we have since the NFO has moved into this area and has offered apparently offered a substantial increase in the market of pork and beef we have been able to take up the slack with those by expanding some in that area I haven't talked with you about your family how many kids do you have well we have five children we have three sons and two daughters I have two sons in college and one that finishes high school this school year Ian which will be in a June mm-hmm what kind of hopes do you have for these young people particularly your sons I would guess now that I know you and now that I know that this is the fourth generation of the white family on this particular farm but you would hope that there would be a future for these boys in farming well of course yes this has been my last dream that would be some way for these boys to involve ourselves in farming the two that are in college now expect a major in agriculture studies at Auburn University and like I say this has been my dream and rare and these sons here on this farm they know it now the general operation of it and they don't mind the work they understand what it takes to make a farm produce and the only problem we have is getting a fair market for the good we produced well you're asking is a price at the marketplace that is fair that they can feel like that they've got a fair piece of the action that I think they deserve they they don't want something for nothing we never have had and we don't expect to start getting something for nothing now all we want is a is a chance to sell our products for a reasonable price like the people that work at their plants and local employment the places that have less than the standard average in the United States even now but it's theirs under the president conditions like I can't really see any bright future for them unless we can develop some program that will show them some incentive for for their efforts do you feel ET that the NFO is making efforts in the area of getting for the farmer that fair price for his product at the marketplace apparently they're they're working in the right direction we all know that food is is the basis for all of our society and we also know that somebody must continue to do this thing I hope you've enjoyed US farm reports coverage of the plight of the broiler producer these past two weeks our coverage emanating in the Cullman Alabama area US farm report is seen on this station each week at this same time until next week so long everybody [music]