Poultry Expansion 101 Facts

Dr. Sheila Purdum Author

10/04/2018 Added

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You are all well aware of the expanding poultry industry in Nebraska. To better equip you to answer some of the questions that you are or will be asked regarding the poultry industry, Dr. Sheila Purdum and the Poultry Group has developed a webinar series to help us all better understand this industry.

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[00:00:00.492](keyboard clicking)
[00:00:35.632]Hi Dennis!
[00:00:36.630]Hello Sheila!
[00:00:37.463]Can you hear me?
[00:00:40.640]We will be starting at 11:15.
[00:00:48.660]Okay, what are you gonna cover briefly,
[00:00:53.000]because I need to go down and get some things set up
[00:00:55.730]in the meat lab for a one o'clock class?
[00:01:02.886](keyboard clicking)
[00:01:11.300](muffled voices)
[00:01:56.050]Hi Rick!
[00:01:59.380]Good morning!
[00:02:01.920]Alright.
[00:02:03.810]Okay, I'm gonna go ahead and get started.
[00:02:05.790]This is the first of our webinar series.
[00:02:09.490]Welcome to the event.
[00:02:11.620]We have a relatively short presentation today,
[00:02:14.690]just an introduction into
[00:02:17.010]the Nebraska poultry industry expansion.
[00:02:20.040]And this is being recorded so that
[00:02:22.190]it will be available to all extension educators.
[00:02:25.780]And just for your information,
[00:02:27.420]we will also be posting the recording
[00:02:30.050]on our website, our animal science website
[00:02:33.230]under poultry extension.
[00:02:35.870]So I'm gonna go now to the shared presentation
[00:02:39.960]which is a PowerPoint.
[00:02:46.166]And I mainly want to talk about
[00:02:49.500]what's going on in the poultry production
[00:02:52.060]and management side, and poultry expansion here
[00:02:55.410]and talk a little bit about terminology and numbers.
[00:03:02.050]Make sure I can do this correctly.
[00:03:06.160]It's a slide show.
[00:03:08.520]Okay, so we wanna talk a little bit about poultry expansion
[00:03:13.240]in Nebraska, and I want to make everybody aware
[00:03:16.410]that there are two types of housed chickens in our state.
[00:03:20.800]There are chickens that are grown on the floor,
[00:03:23.540]which would be primarily broiler chickens,
[00:03:26.550]grown for meat products.
[00:03:29.800]And then chickens housed in cage-types of systems,
[00:03:35.310]which are primarily the chickens that are producing eggs.
[00:03:39.560]The egg-type chickens are kept in cages
[00:03:42.580]or aviaries, for over a year.
[00:03:45.940]So their longevity is much longer than the broiler chicken,
[00:03:49.760]in which longevity will be more to an age of around
[00:03:53.350]six to eight (audio distorts),
[00:03:55.230]with a down period in between different cycles
[00:03:58.340]and different (audio distorts).
[00:04:02.850]What is going on with poultry consumption?
[00:04:06.040]Poultry consumption has had a steady incline
[00:04:09.920]over the last, even in just 15 years.
[00:04:14.210]Across five years you'll see the green bar
[00:04:17.270]showing an incline in chicken consumption
[00:04:21.460]compared to a relatively stable consumption of beef
[00:04:26.110]and a slight rise three years ago in pork consumption.
[00:04:30.290]So total protein consumption is high
[00:04:33.230]in the United States and still increasing for poultry.
[00:04:37.780]Thereby the demand for chicken by the US consumer
[00:04:41.640]is also increasing.
[00:04:45.720]The poultry industry sectors include
[00:04:48.020]the broiler industry, which is the meat sector,
[00:04:52.950]commercial egg industry, producing eggs for consumption
[00:04:57.440]and then also the turkey industry,
[00:05:00.020]which again is primarily for a meat product consumption.
[00:05:06.260]We have all three sectors presented in Nebraska.
[00:05:10.470]However, our primary industry
[00:05:12.560]has always been egg production,
[00:05:14.830]not as strong in broiler or turkey.
[00:05:19.590]When you look at broiler production by the state,
[00:05:23.810]it has traditionally been aligned with the southeast part
[00:05:27.470]of the United States, with the leading states
[00:05:30.940]being Georgia, Arkansas, Alabama.
[00:05:35.820]Those are our traditional high producing broiler states.
[00:05:40.100]Nebraska's been very small.
[00:05:41.850]We've had one operation, Smart Chicken,
[00:05:45.140]and Tecumseh Poultry, which is the same company
[00:05:48.980]and they're marketed as the Smart Chicken.
[00:05:51.380]So we have that small blue hash
[00:05:54.680]with the addition of the Costco plant.
[00:05:57.700]I don't think we'll be quite to the point
[00:05:59.860]of being a solid blue state,
[00:06:02.010]but we have the potential to be a solid blue state,
[00:06:05.890]because of our easy access to commodities
[00:06:10.360]and land for fertilizer application
[00:06:13.750]as well as a tremendous water resource here in our state.
[00:06:20.530]Turkey production, we also have a hash bar presence
[00:06:25.950]in turkey production in the United States.
[00:06:28.660]I do not see us increasing in turkey production
[00:06:32.130]in the near future, largely like we will in broilers.
[00:06:37.830]However, we do have a new turkey hatchery in Beatrice,
[00:06:43.160]and that is definitely helping our turkey numbers,
[00:06:46.780]and potential to increase in turkey production.
[00:06:52.220]And then finally commercial egg.
[00:06:53.830]This has been our strength for the last 25 years.
[00:06:57.230]Here in Nebraska, we are known as an egg producing state.
[00:07:01.340]We rank usually around ninth to 10th
[00:07:04.000]in egg production in the United States.
[00:07:06.870]However, this is a very mature industry in our state,
[00:07:10.460]that is seeing upgrades in housing
[00:07:14.280]and not necessarily increase in numbers.
[00:07:20.290]So overall the value of poultry in the United States,
[00:07:26.940]primary value comes from broiler production.
[00:07:29.960]There are many more pounds of broiler meat consumed
[00:07:32.710]than there are dozens of eggs.
[00:07:35.430]However, eggs does rank second behind broilers
[00:07:38.130]in the United States, and then finally followed by turkeys
[00:07:42.930]and other types of poultry products.
[00:07:46.150]So the growth in the broiler industry
[00:07:49.470]has come and is coming to Nebraska.
[00:07:52.110]That's gonna be our growth sector.
[00:07:58.000]The poultry industry's economic structure
[00:08:00.500]is a little different than what
[00:08:01.740]we have traditionally seen with Nebraska livestock.
[00:08:05.860]Most commercial production
[00:08:07.490]is vertically integrated with contracts.
[00:08:11.940]You will find as you work
[00:08:13.780]with different potential producers in this state,
[00:08:18.140]and in your counties that contract production
[00:08:21.240]is what's being offered to them,
[00:08:24.530]and there's a lot of different factors
[00:08:26.660]taken into an account with a contract,
[00:08:29.760]and we could have a webinar on specifically
[00:08:32.670]what to look for in contracts later on,
[00:08:36.530]probably with an outside speaker.
[00:08:39.310]There are growth specialty market sectors as well,
[00:08:44.390]nutrient enhanced poultry products, organic,
[00:08:49.090]that support independent producers and marketers.
[00:08:55.310]When you look at a vertically integrated structure
[00:09:00.090]you'll find that the potential integrator
[00:09:03.460]is gonna be the primary investor
[00:09:06.050]as well as the contract producer.
[00:09:08.510]Your primary investor, let's take, for example,
[00:09:12.290]Smart Chicken and Tecumseh Poultry,
[00:09:14.890]they actually in their situation,
[00:09:17.710]own the processing plant and further processing.
[00:09:23.210]They do not own a feed mill.
[00:09:24.940]They have an outside company contracted
[00:09:27.280]to bring in the feed.
[00:09:28.750]They do not own a hatchery.
[00:09:30.560]They buy chicks from an outside hatchery,
[00:09:33.550]and then they have contract grow-out houses
[00:09:36.780]as well as company-owned houses.
[00:09:39.660]That is a very specific structure to that company.
[00:09:43.540]The new company that's building in our state, Costco,
[00:09:47.720]is more of a traditional integrator schematic,
[00:09:53.370]such that they will own treater stock.
[00:09:57.790]They are building a hatchery, a feed mill
[00:10:01.820]and a processing plant.
[00:10:03.170]Those three major structures,
[00:10:05.440]they are building in the Fremont area.
[00:10:08.350]They are contracting with farms and producers
[00:10:13.170]to produce the fertile eggs at breeder farms.
[00:10:17.530]They're also contracting with producers
[00:10:19.710]to put up grow-out houses to grow their chicks.
[00:10:24.160]So this schematic from the National Chicken Council
[00:10:28.200]correlates very well with what's going on
[00:10:31.160]with the Costco plant.
[00:10:33.220]What they're not doing, they are not building
[00:10:35.810]a rendering plant at this time.
[00:10:38.160]So byproducts from the processing plant
[00:10:40.980]and the hatchery will most likely
[00:10:43.260]be going to Darling Industries would be my guess.
[00:10:47.179]I can't completely confirm that.
[00:10:50.080]But this chart also shows the flow
[00:10:53.300]of the commodities, corn, soybean meal,
[00:10:56.400]through the feed mill into the rations
[00:10:59.140]as well as the flow of the fertilizer
[00:11:01.960]coming back to the fields.
[00:11:04.020]And it's good to recognize that nothing is wasted
[00:11:08.833]or considered really a waste that cannot be
[00:11:13.610]put through some types of process
[00:11:16.400]so that it's going back into the stream of fertilizer
[00:11:20.390]or coming out of a rendering plant,
[00:11:23.100]going probably to pet foods.
[00:11:25.630]And that's not necessarily resembled in this chart.
[00:11:38.050]Terminology, it's very important as educators,
[00:11:41.820]work with potential producers or potential businesses
[00:11:46.850]that are going to be doing business
[00:11:48.410]with the poultry industry,
[00:11:50.240]that we understand correct terminology.
[00:11:53.830]Chickens, the young females are called pullets,
[00:11:57.700]and the males are called cockerels.
[00:12:00.870]They may or may not be grown sex separate.
[00:12:05.071]In many instances they are grown sex separate.
[00:12:08.900]But if they are grown together,
[00:12:10.780]it's called a straight run.
[00:12:13.830]A mature female, obviously is called a hen,
[00:12:16.280]and a mature male, a rooster.
[00:12:20.050]Given the increase in hatchery business
[00:12:23.240]as well in Nebraska, the new Hendrix hatchery
[00:12:26.920]in Grand Island, will have the unfortunate task
[00:12:31.160]of having to destroy their cockerels.
[00:12:35.170]Unfortunately in the commercial egg industry,
[00:12:37.640]there's not a lot of need
[00:12:39.520]for cockerels or roosters in a hen house.
[00:12:44.020]So there are some animal welfare issues
[00:12:46.610]that you may get asked about as well.
[00:12:49.190]What is happening with the cockerels at those hatcheries?
[00:12:52.730]And the primary thing that's happening
[00:12:54.590]is that they are euthanized and disposed of.
[00:12:58.990]Go on to turkeys, the young poults,
[00:13:01.490]include females which are called hens
[00:13:04.630]and then males are called toms.
[00:13:06.780]It's just a little something different
[00:13:08.430]in the turkey industry, but you should be aware of it
[00:13:11.180]as you're talking with potential businesses and growers.
[00:13:19.050]The breeds used to develop modern synthetic lines
[00:13:22.120]are quite different for meat production
[00:13:25.210]versus egg production.
[00:13:27.410]And the meat production breeds included the
[00:13:30.790]circle American breeds that years ago came together
[00:13:34.280]for the modern hybrid broiler,
[00:13:36.960]included the New Hampshire breed,
[00:13:39.210]White Plymouth Rock and Cornish.
[00:13:42.010]So if you go out and look at modern broiler chicken,
[00:13:45.010]it's not a purebred.
[00:13:46.970]It is a cross.
[00:13:50.570]They have high growth rates and carcass characteristics
[00:13:54.290]to produce basically the intensity of selection right now
[00:13:58.630]is for breast meat yield,
[00:14:00.750]not necessarily prolific egg production.
[00:14:05.340]Those birds for egg production.
[00:14:07.930]are more the commercial layers.
[00:14:11.740]When you look at the egg production process,
[00:14:15.010]the cycle for reproduction is more quick
[00:14:19.560]than it is with other types of livestock,
[00:14:22.480]therefore, improving the efficiencies
[00:14:26.530]of meat production or protein production in poultry.
[00:14:31.640]Grandparent rearing takes 18 weeks
[00:14:35.540]to just grow a chicken to the point of reproduction.
[00:14:40.050]And the grandparents producing hatching eggs
[00:14:43.670]is what will start first in the Costco operation.
[00:14:47.840]So I'm not sure about the open house last Thursday,
[00:14:52.100]which particular type of house it was,
[00:14:55.140]but my guess is it could have been
[00:14:56.710]a grandparent rearing house.
[00:14:59.510]They are producing eggs that will go to the hatchery,
[00:15:04.010]will be incubated, and a egg chick takes three weeks
[00:15:09.040]to incubate or hatch.
[00:15:11.450]Once that egg is hatched, then we have parent rearing.
[00:15:15.580]Parent rearing will include both the rooster and the hen.
[00:15:19.660]However, the ratio is such that one rooster
[00:15:23.440]can service around eight to 10 hens.
[00:15:27.440]So there will still have to be euthanasia
[00:15:30.870]of extra cockerels at the hatchery,
[00:15:36.530]in that particular step.
[00:15:39.530]The parent rearing should start up in a company like Costco,
[00:15:44.250]probably, I would say next spring.
[00:15:47.970]Parent rearing, all of those fertile eggs
[00:15:50.250]go the hatchery and hatch,
[00:15:52.590]and then those particular chicks
[00:15:54.420]are taken out for pullet or broiler rearing.
[00:15:58.220]This particular example is in
[00:16:00.480]commercial egg production process.
[00:16:03.860]So it takes 17 months to get that commercial layered
[00:16:09.830]from the grandparent to the layer.
[00:16:12.180]It doesn't take that long in the broiler situation.
[00:16:15.130]You can take out quite a few months
[00:16:17.850]and you'd be around nine to 10.
[00:16:20.260]Alright, so this is not overnight,
[00:16:22.760]just go get eggs, put them in the incubator,
[00:16:26.470]and have chicks ready to rear.
[00:16:29.030]There's quite a process and investment by the company,
[00:16:32.490]getting them ready to that point.
[00:16:37.370]Nebraska poultry numbers.
[00:16:39.980]Going back to broilers, that's where
[00:16:41.740]our primary expansion is occurring right now.
[00:16:45.890]And obviously, everybody's aware of the Costco project,
[00:16:49.580]but we have a very strong, I wanna say stable
[00:16:54.330]and mature company with Smart Chicken.
[00:16:57.880]It did get bought out by Tyson this year.
[00:17:02.060]And the main reason is Tyson wanted to expand
[00:17:05.160]their organic poultry product line,
[00:17:08.890]and they bought Smart Chicken
[00:17:10.410]because they're one of the top three
[00:17:13.330]organic poultry product producers in the United States.
[00:17:19.980]And Costco will be processing in one day,
[00:17:24.700]the same number that Smart Chicken processes in a week.
[00:17:28.800]So it's gonna be 250, I believe, to 300,000 birds a day.
[00:17:33.440]So that's quite a jump in growth for the number of chickens
[00:17:36.874]and all the auxiliary buildings, contract producers
[00:17:40.950]and businesses to support that growth.
[00:17:45.880]Our current laying hen expansion
[00:17:47.820]has primarily been through a hatchery,
[00:17:51.210]which is already online in Grand Island, Nebraska,
[00:17:54.660]Hendrix Company.
[00:17:56.140]And they are basically producing egg pullets
[00:18:01.511]for I think they're going out all across the nation,
[00:18:05.770]not just Nebraska.
[00:18:06.860]They are being exported to other states as well,
[00:18:09.540]and possibly even internationally.
[00:18:13.180]So the hatchery growth in this state has been through
[00:18:17.210]a layer stock hatchery, the one in Grand Island.
[00:18:21.030]Hendrix also has a turkey hatchery
[00:18:24.820]which is already in line in Beatrice area.
[00:18:29.550]And then finally broiler hatchery.
[00:18:31.820]A hatchery will be built,
[00:18:34.115]and is already under construction in Freemont, Nebraska,
[00:18:37.420]to support the Costco project.
[00:18:40.690]And for your information, the chicks that are hatched
[00:18:45.470]specifically for Smart Chicken are brought in
[00:18:48.370]from Welp's Hatchery in Iowa.
[00:18:50.650]And I would anticipate Smart Chicken eventually
[00:18:54.210]having their own hatchery as well in this state.
[00:18:57.670]And hatcheries have a very unique challenges.
[00:19:01.990]They do have a number of materials
[00:19:04.800]that have to be recycled as they come out of hatcheries.
[00:19:07.670]Hatchery waste is a very specific type of waste.
[00:19:11.700]And if you happen to be workin' in one of those counties,
[00:19:14.580]it would be good for you to be aware
[00:19:16.700]of how that waste is handled
[00:19:18.750]and recycled into other plots.
[00:19:24.950]The challenges for poultry expansion,
[00:19:27.410]obviously building permits for contract producers
[00:19:30.750]has been a challenge in certain counties
[00:19:33.540]and areas where expansion has been pretty closely housed,
[00:19:40.780]near let's say urban areas.
[00:19:44.250]Just for example, I got a call from someone
[00:19:47.010]who lives in Blair, Nebraska, last week,
[00:19:49.830]and he wanted to find out where
[00:19:51.580]the nearest chicken house was,
[00:19:53.410]where he could just go buy and smell how bad it was.
[00:19:56.890]And that was a very interesting conversation and call
[00:20:01.640]to kind of settle that person and help them be aware
[00:20:04.840]of the housing situation of new broiler houses,
[00:20:09.240]and risks to him about the odor and how odor,
[00:20:15.250]and how dust is handled within these new structures.
[00:20:19.830]So it is very important that we continue
[00:20:21.820]to have a conversation with those types of callers,
[00:20:26.500]to help provide some scientific information
[00:20:29.760]about what the real risks are.
[00:20:32.790]New infrastructure.
[00:20:33.930]This is new for many county educators to get used to
[00:20:37.900]the infrastructure, how decisions are made,
[00:20:40.960]how I wanna say overall manager and team
[00:20:46.340]from a company may work with that producer
[00:20:49.019]and that producer may get information from that team,
[00:20:53.860]that they may be contracting with
[00:20:56.360]before they get information from county extension educators.
[00:21:00.220]So it's a different type of relationship
[00:21:03.440]that we're building on behalf,
[00:21:05.770]of not just the producers, farmers using the waste,
[00:21:10.250]and then how they work with the integrator.
[00:21:13.150]And then finally, that neighbor acceptance issue
[00:21:16.580]that we all know has been very important.
[00:21:22.950]Rick Koelsch.
[00:21:24.690]Dr. Koelsch came up with this particularly diagram,
[00:21:27.720]and it's in the flyer that I sent out to everybody,
[00:21:30.810]and should be in a publication that's already online.
[00:21:36.130]Broiler House Traffic.
[00:21:37.590]This is one up again, the challenges is infrastructure,
[00:21:42.660]road support, businesses to provide trucks,
[00:21:48.510]and transportation needs and service.
[00:21:51.570]It's huge, but it's not that different
[00:21:55.200]from what already exists in the infrastructure
[00:21:58.510]for harvest and taking your commodities to market.
[00:22:03.940]The primary trucks are coming in with feed delivery
[00:22:07.620]and finish birds going out,
[00:22:10.120]and it's about two loads per week,
[00:22:13.250]and it's not ridiculously high.
[00:22:17.050]I'm not sure which roads merit may be stressed.
[00:22:20.870]Again the county educators will have a better idea
[00:22:24.190]where the houses are going in and what type of stress
[00:22:27.550]this will perhaps bring to bridges being out
[00:22:32.730]that have been out or going out, or being redone.
[00:22:36.450]So this is a nice diagram with some pretty good takeable,
[00:22:42.309]take-home messages that educators
[00:22:44.790]can use as they're working with
[00:22:46.180]potential growers in their counties.
[00:22:50.940]Okay, I'm gonna stop that share, and come back online,
[00:22:57.933]and see we have several other people.
[00:23:00.210]Primarily our faculty, but again I wanna remind everybody
[00:23:05.880]that this is being recorded,
[00:23:08.100]and it will be available online
[00:23:11.180]at our animal science website under poultry extension,
[00:23:15.240]so that any educators or people
[00:23:17.480]who have further questions can hook in
[00:23:20.640]and ask those questions.
[00:23:22.610]And it would also be available
[00:23:24.150]to the general public as well,
[00:23:25.960]but we want to have it available to educators first.
[00:23:30.080]I'm gonna stop here and ask if anybody
[00:23:32.450]has any questions or comments.
[00:23:37.260]Yeah, hi Sheila, Don Reynolds here.
[00:23:39.000]Can you hear me?
[00:23:40.250]Everybody's pretty quiet.
[00:23:43.860]Alright Sheila can you-- You have somethin'.
[00:23:45.637]Are you saying something?
[00:23:47.780]Yes, Don Reynolds here.
[00:23:49.630]Rick, I can't hear you if you are, but--
[00:23:53.935]Ahh.
[00:23:57.140]Sheila this is Rick.
[00:23:58.652]Don Reynolds-- I'm gonna go ahead.
[00:24:00.610]And stop recording now and next week I will host
[00:24:04.120]and I believe Amy Schmidt is speaking next week.
[00:24:08.120]And if anybody has any concerns or followup,
[00:24:11.190]feel free to email me and we will have this
[00:24:14.320]available online very shortly.
[00:24:17.320]Thank you.

Poultry Expansion 101 Facts

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