Arkansas poultry farmers left with empty chicken houses after the bankruptcy and sale of Pilgrim’s Pride Corp. are each eligible for up to $100,000 in federal relief funds, the Arkansas Agriculture Department said Tuesday.
The financial assistance is available through a $60 million U.S. Department of Agriculture grant awarded to Arkansas and eight other states. The grant is part of a $550 million agricultural disaster-relief fund the USDA announced Sept. 15.
The $100,000 maximum payout allowed under the program could provide the means for a poultry farmer to hang on to a farm that has been in the family for generations, one grower said Tuesday.
Lloyd Phelps, a Union County farmer since 1973 and the operator of six chicken houses from 1978 until May 2009, said Tuesday that the grant money is welcome help for poultry growers who have bank loans for no widled poultry houses.
When first interviewed by the Arkansas Democrat-Gazette in March 2009, Phelps said a modern chicken house can cost more than $200,000 to build to company standards. Yearly loan payments can add up to more than $100,000 a year, depending on the number of houses on a farm.
Phelps said then that he needed $60,000 to make his payments in 2009.
Poultry farmers like Phelps who lost contracts with then Texas-based Pilgrim’s Pride, which filed bankruptcy in December 2008, are eligible for financial assistance from the block-grant program. Pilgrim’s Pride contracted with 142 growers in the Clinton area and about 290 in the El Dorado/Farmerville, La., area. Pilgrim’s Pride closed its Clinton operations in August 2008 and the El Dorado facilities in May 2009. The company filed for Chapter 11 bankruptcy in December 2008 and was bought by Brazilian meat-processing giant JBS SA in December 2009. It now operates out of Greeley, Colo.
Arkansas, Alabama, Florida, Georgia, Louisiana, North Carolina, Pennsylvania, Tennessee and Texas will share the $60 million. Allocation of funds among the states will be determined after the applications have been received.
Poultry growers who had their agreements terminated before July 1 and did not enter into another contract for one month after the termination may apply.
Assistance will be calculated at 95 percent of a grower’s production receipts for the most recent 12 months before termination. Total payout per farmer is limited to $100,000.
Compliance with the USDA’s conservation provisions and requirements related to off-farm income will also determine the level of assistance.
Applications for assistance must be received by the Arkansas Agriculture Department by Nov. 18, the release said.
The $550 million agriculture disaster relief fund is less than half what Arkansas’ U.S. Sen. Blanche Lincoln, a Democrat, initially asked for. Lincoln withdrew her request after shereceived assurance from White House Chief of Staff Rahm Emanuel that the Obama administration would find a way to fund the program administratively, the Democrat-Gazette reported in September.
Phelps said he had not been personally notified of the program, but he said he knows there is a meeting Thursday for El Dorado farmers.
“I’m going to be there,” he said.
Business, Pages 25 on 10/27/2010