Chapter 2: Overview of the Poultry Industry in Arkansas

A significant and growing sector

Poultry is big business. In 2014, the value of broiler chickens produced in the United States was up 6% from 2013, at $32.7 billion. [15] According to the USDA’s 2012 Census of Agriculture, poultry and egg sales alone constituted $42.8 billion, 11% of total U.S. agricultural sales, while the industry’s total effect contributes substantially to the labor market, exports, and beyond. [16]

The poultry industry is fairly concentrated, with a handful of companies dominating the industry in Arkansas and nationwide. The top five broiler producing companies in the United States are Tyson, Pilgrim’s Pride, Sanderson Farms, Perdue Farms, and Koch Foods. [17] Tyson dominates the market in Arkansas; over 20% of the company’s U.S.-based employees work in Arkansas, the company employs over half of all poultry workers in the state, and its Tyson Foods headquarters is located in Springdale. [18]

The industrial chicken sector is vertically integrated, meaning that a company can own and control the process (and the chicken) from the hatchery through its delivery to a local retailer. The farming and processing of chickens is a significant and growing portion of the economy in the state of Arkansas. In terms of cash receipts, poultry accounts for 4% of agricultural production in the state. [19] Typically, the state produces around one billion broilers every year, and the state’s share of total national chicken production is growing. [20] Arkansas was third in the nation in broiler production in 2012, but second in 2013, with exports valued at $533 million. [21] When all poultry products, including eggs, are taken into account, poultry products make up $646 million in agricultural exports for the state, and after rice and soybeans they are the largest agricultural exports. [22] The most recent USDA annual estimates, for 2014, indicate that Arkansas produced 969,800,000 broilers out of a total U.S. production of 8,544,100,000, constituting over 11% of total broilers.

Agriculture, including the processing of farmed products, brings over an estimate of $20 million to the state’s economy (17%) and provides one out of every six jobs in the state. [24] Poultry constitutes a full quarter of Arkansas’s agricultural economy, contributing 36,503 jobs and adding an estimated $2.17 billion in value. [25]

On the manufacturing side of the poultry industry, Arkansas is seventh, nationwide in employment of meat, poultry, and fish cutters and trimmers. [26] The poultry industry spans across the state, led by Washington and Benton Counties. [27] What’s more, northwest Arkansas, consisting of the nonmetropolitan areas around Fayetteville, Springdale and Fort Smith, hosts the third and fourth highest concentrations of jobs in poultry cutting and trimming in the entire country, with more than 12 poultry cutters for every 1,000 total jobs. [28]

How many jobs?

With almost 28,000 workers, poultry processing is the fifth largest employer in the state when compared to other detailed industries. [29] Over 12% of all poultry processing jobs are found in the state of Arkansas, a state that constitutes less than one percent of the total U.S. population. [30]

Poultry processing workers are the people who ultimately transform the chickens that grow on Arkansas’s farms into the drumsticks, cutlets, and prepackaged meals we consume.

While the chicken industry, its profits, and its exports are on the rise, actual jobs for Arkansas poultry processing workers have dipped somewhat over the past decade. [32] In 2004, there were 32,392 jobs in poultry processing, while in 2014 the number dropped to 27,432, [33] perhaps due to automation. One of the primary occupations within the industry, cutters and trimmers, is forecasted to see modest job growth, with an estimated 5% increase in jobs between 2012 and 2022. Slaughterers and meat packers, on the other hand, are expected to see a 2% dip in jobs over the same period, possible also due to automation. This is in contrast to overall job growth across industries in the United States, which is forecasted to rise 11%. [34]

When we compare jobs in poultry processing to overall manufacturing jobs, though, it is clear that poultry processing provides better than average job stability. Total manufacturing jobs dropped quite dramatically between 2006 and 2009, before finally stabilizing. Over the decade between 2004 and 2014, total manufacturing jobs dropped from 203,676 to 154,122, a percentage loss of nearly 25%.

Poultry processing accounts for approximately 18% of all manufacturing jobs in Arkansas and 2.4% of all workers in private firms. [35] There were 53 poultry processing establishments in 2004, and 10 years later there were 49, possibly due to consolidation of the major national poultry companies that dominate the state. [36]

Wages

Poultry workers are paid well below a living wage in Arkansas and poultry workers’ wages have risen 25% less than all other private sector workers’ wages. [37]

Arkansas poultry workers earn an average of $28,792. [38] If this wage represents a 40-hour work week over 52 weeks each year, poultry workers make an estimated $13.84 per hour. Even for families with two workers making this ($57,584), the wage falls well below a living wage for the nonmetropolitan U.S. South ($71,000). According to the Department of Labor’s Lower Living Standard Income Level (LLSIL) calculations, the income of a poultry worker supporting a family of four falls just above the poverty level. [39]

The average wage for poultry workers nationwide is estimated at $12.50. [40] This wage, for 40 hours over 52 weeks represents a salary of only $26,000. According to this estimate, Arkansas’s poultry processing workers make more than the national average. However, wages vary within the poultry processing industry and are below the average for the majority of animal processing workers, who work as slaughterers, cutters, trimmers, and meatpackers. Arkansas poultry and fish cutters and trimmers make on average (mean wage) only $22,660. Neither Arkansas as a whole, nor its metropolitan or nonmetropolitan areas, offers the highest average wages for meat, poultry, and fish cutting and trimming. [41] Similarly, the state’s slaughterers and meatpackers, which include people working in poultry and other animal processing plants, are paid on average $22,730 per year, while the best paying state for this occupational category is Colorado, with an average wage of $31,510 annually ($15.15 per hour). [42] Notably, even this wage, high as it is for the industry, represents an income just over the poverty level in the U.S. West. [43]

Wages have risen for Arkansas poultry workers over the last decade, from $23,326 average annual pay in 2004 to $28,792 in 2014, but have risen more slowly than other private sector workers. [44] The average pay for all nonagricultural workers in Arkansas was $39,976 in 2014, and $39,723 for employees in private companies. Notably, poultry processing annual pay has risen much more slowly than it has for private industry on average, which rose from $29,802 to $39,723. Thus, poultry processing wages have risen 19%, while private industry wages have risen 25% over the same period. [45]

Demographics

Nationwide, the demographics for butchers and other meat, poultry, and fish cutters and trimmers suggest that approximately 35.4% of workers are Hispanic or Latino, 20.2% African American, and 8% Asian. [46] For animal slaughtering and processing, as an industry, the population is 35% Hispanic or Latino, 19.6% African American, and 7.8% Asian. [47]

According to the Census’ American Community Survey data spanning 2007 to 2012, Arkansas’s animal slaughtering and processing workforce is 43% white non-Hispanic, 33% Hispanic or Latino, 17% African American, and 6% Asian. [48]

Where are the jobs?

In 2012, the Census Bureau estimated that Independence County, Sebastian County, and Washington County — the counties with the greatest concentration of poultry workers — all had 2,500–4,999 employees in the poultry processing industry. [50] Benton and Washington Counties have the highest number of poultry factories, with Benton County having 10 and Washington County having seven. [51] Washington County is the only county with two establishments of 1,000 or more employees. [52] One large facility of 1,000 or more employees can be found in each of Benton, Carroll, Crawford, Hempstead, Howard, Jefferson, Johnson, Sebastian, and Sevier Counties. [53]

The racial and ethnic demographics of northwest Arkansas, the locus of poultry processing, contrast sharply with the state’s demographics as a whole. The state, overall, is over 70% white and non-Hispanic, with African American representing another 15% of the population and Latinos 7%. However, Benton and Washington Counties have relatively small African American populations and much higher numbers of Hispanic and Latino residents, at over 16% of the counties’ populations. The foreign-born population of these counties is also higher than average, with 11% foreign-born residents contrasted with the state’s average of only 4.5%. [54]

NEXT: Chapter 3: Workers’ Perspectives