Some 154 poultry farmers throughout Arkansas have already received their share of $17.7 million in federal relief funds from the U.S. Department of Agriculture, the state Agriculture Department said Thursday.
Richard Bell, state agriculture secretary, said more than $12.8 million has already gone to poultry growers whose houses were left idle when Pilgrim’s Pride Corp. closed processing facilities in Clinton in August 2008 and El Dorado 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. The company moved its headquarters from Texas to Greeley, Colo., in 2010.
Pilgrim’s Pride Corp. still employs about 2,000 people in Arkansas at processing plants in Batesville and De Queen, rendering plants in Russellville and El Dorado, a feed mill in Hope and a vendor-support office in Bentonville.
The company employs 42,000 people and contracts with 4,100 growers to supply the 38 million birds it processes each week in plants in the United States, Mexico and Puerto Rico, according to the company’s website.
Poultry growers in smaller towns or rural areas often have limited options if a processor closes a plant, said Gene Simpson, professor of agricultural economics at Auburn University in Alabama.
“It is a one-shop area. If there is not another integrated company in town, they won’t be able to grow for anyone,” Simpson said.
Poultry companies keep growers within a 30- to 35-mile range of feed mills and processing plants as a general rule, Simpson said. Some may have a grower or two on farms up to 60 miles away, but that is the exception, he added.
Simpson said poultry houses are costly to build and aren’t suited for any type of use but raising chickens.
Construction costs run about $10.50 per square foot, and the average poultry house is 25,000 to 27,000 square feet, he said.
“That’s well over $250,000 for a house without the land cost,” he said.
The financial assistance is part of a $50 million USDA grant awarded to Arkansas and eight other states as part of a $550 million agricultural disaster-relief fund, the USDA stated in September.
Checks began going out last week, Bell said. The average check is about $82,000 but some farmers have qualified for the maximum $100,000.
“Of course, their losses were more than that for them to qualify for the maximum,” Bell said.
The majority of the checks are going to the 142 Pilgrim’s Pride growers who supplied the plant in Clinton in Van Buren County and the 290 growers who supplied the El Dorado plant in Union County, Bell said.
“But we’ve had some go out to areas like Cave Springs and other places,” he said.
Once all the paperwork is completed, Bell estimated that more than 200 farmers will have received checks from the grant by the end of March.
While farmers are pleased to be getting some help, some are a little frustrated with the wait for their checks.
Rhett Hanry, a third-generation poultry grower, high school teacher and board president of the Union County Farm Bureau, hasn’t gotten a check yet and wondered why Arkansas farmers were having to wait for checks issued a few at a time.
“We are the ones who worked with Senator [Blanche] Lincoln and the government to get this done but other states got the money first,” Hanry said. “Some people have been put in a tight spot while waiting for that money.”
Bell said his office has been working diligently to get the checks out as quickly as possible.
“We’re having a tough time with some of the data required by the USDA. We’ve had to create the process from scratch. We have to have the paperwork, signed and returned by the farmers, in order to issue the checks. A few times, we’ve had to do the paper over because the USDA changed what was required,” Bell said.
“I’ve sent a lot of letters to banks asking them not to foreclose on farmers who are waiting on grants,” he added.
Bell says Arkansas was the first state to start getting checks out to farmers.
“We didn’t think it would be fair to make people who had all the correct information and paperwork done to wait for the others before they got their checks,” Bell said. “Some people thought they had all the information they needed or that they had done all the paperwork correctly but they hadn’t.”
Mike Strain, Louisiana’s commissioner of agriculture and forestry, told Monroe’s The News Star newspaper that the state’s $11.2 million in grant checks were mailed Tuesday.
Business, Pages 63 on 02/27/2011