Poultry Production, Past and Present
The fact that chicken production and consumption has increased nine-fold in the past 40 years while the average cost per pound to produce chickensfactoring in inflationhas declined by eight-fold, demonstrates just how far the modern chicken farm has come from humble, low-tech roots.
Over the past 50 years, chicken producers and farmers have done everything they can to reduce the costs and time it takes to grow a commercial chicken on the farm and process it into ready-to-serve pieces. Now the emphasis is on the supply chain and how to use technology such as an electronic exchange network to get a better read on demand for today's more specialized, ready-to-serve products.
While many of the advances made in the chicken industry over the past 100 years were mainly a product of trial and error, information systems have stepped into the breach to deliver the two most important elements needed for any mass production industry: speed to market and the reduction of manufacturing costs through efficiency.
"The technology has changed everything about chickens," said Brian Sheldon, a poultry science professor at North Carolina State University. "At every step along the way, computers and manufacturing equipment are making it possible to yield more chicken, and better chicken, in a shorter period of time without having much effect at all on the price per pound."
Virtually every chicken produced in the U.S. comes from contract farmers who enter into partnerships with major chicken processors and distributors such as Tyson Foods, Gold Kist, Pilgrim's Pride and ConAgra Poultry. In fact, this quartet produced more than 48% of all the chicken sold in the U.S. last year.
This form of vertical integration is perhaps the most important factor in reducing manufacturing costs in the past four decades by trimming transaction costs, increasing capacity utilization and providing better quality control as well as a more uniform product.
"For example, a Tyson farmer will know before the chicks arrive from the hatchery whether they are destined to be used for Chicken McNuggets at McDonald's or breaded breast filets for Costco," said Nicholas Anthony, a professor of poultry science at the University of Arkansas.
This system also virtually eliminates the costly possibility of either an oversupply or shortage of chickens for the manufacturer and, in turn, the eater of food. Combined with the electronic exchange networks, chicken manufacturers eventually will have a crystal-clear view of the level of demand from distributors and retailers and can adjust their farming specifications and schedules accordingly.
To understand how manufacturers have sped up the time to market, you have to start with the egg. Improving the genetic potential of broilers was essential in transforming chicken farming from basically a subsistence-farming afterthought to a $28 billion-a-year industry.
Today's commercial chick is the product of hundreds of years of trial-and-error breeding. Improvements in molecular biology and genetic fingerprinting in the past 20 years have helped chicken breeders develop commercial chickens that grow exponentially faster, larger and with less chance of disease than their predecessors.
The Barred Plymouth Rock or New Hampshire breed of chicken that was the bird of choice 50 years ago has been replaced by, as just one example, an Arbor Acres Yield bird of today. The old birds would take 70 to 80 days from birth to reach a harvest weight of 2.75 pounds with a feed conversion ratio (pounds of feed to pounds of chicken meat) of 4-to-1. Today's birds typically reach between 4 to 5 pounds in weight in about 45 days with a feed conversion ratio of 2-to-1 or less.
Call it Moore's Law for the chicken set.
These dramatic improvements in yield are directly tied to the genetic potential of the modern chick, but these gains could not be realized without advances that technology systems have provided to the grow-out farms.-Out Farm">
The Grow-Out Farm
In the first half of the 20th century, most chickens were kept in small numbers, ranging from a few dozen to a couple of hundred, on the family farm. Farmers would feed the birds by hand, essentially throwing grain on the ground and letting the chickens fight it out among themselves.
As many as 15% to 20% of the flock would die from either exposure to inclement weather, lack of nutrition or diseases from intermingling with other farm animals.
Building houses exclusively for chickens was a good first step but one fraught with a new set of problems. Ventilation was poor, leaving the birds vulnerable to extreme weather. Feeding was still done by hand or by utilizing a crude trough system that didn't evenly disperse food and water. Further, having the water served in a trough resulted in condensation issues that brought on unwanted diseases and other health issues.
Most of these first chicken houses didn't have electricity and were significantly smaller than the modern chicken house. Stuffing a few hundred birds into a 20-foot-by-20-foot box increased the mortality rate because chicks had a tendency to trample each other, peck each other and occasionally eat each other. The modern chicken house is at least 40-feet-by-400-feet and can accommodate up to 100,000 chicks at once.
Every conceivable aspect of the modern chicken house is measured, monitored and regulated by software and hardware from companies such as Chore-Time Systems and Eldar Shany Technologies. These systems run on Windows-based systems giving farmers up-to-the-second reports on the temperature, feed and water consumption and weight of the birds.
Windows, heaters, coolers and humidifiers are all automated based on information the software retrieves from the various sensors and thermometers. If the humidity in the chicken house gets too high or too low, the computerized system will adjust the lighting and ventilation in the room to provide the optimum growing environment.
Food and water consumption are monitored closely to ensure the birds are getting the appropriate amount of both. If the birds are eating too much food or drinking too much water, the farmer is alerted and he or she can then inspect individual birds to assess whether or not disease or other environmental issues are creating a problem.
Medicine to prevent or treat various diseases are delivered through the automated feeding machines, cutting down on mortality rates. Consider the average mortality rate of a flock before this technology was installed was 10% compared to less than 5% today.a Price">
This Technology Comes at a Price
Darrell Sanders, a contract farmer in Seagrove, N.C., recently installed four new chicken houses using Chore-Time Systems' technology. Each house cost between $560,000 and $700,000 each.
"With the new technology, the houses are easier to manage and produce a better yield, but the biggest drawback is you become a prisoner to your farm," he says. "I've got pagers that alert me when something's wrong but you only have a few minutes to react. In the past, when the houses weren't so dependent on technology, you had more time to adjust the temperature or the water. Now, you've got to get there quick or else you'll lose thousands of birds."
This dependence on technology has extended from the processing plants where dozens of cutting, skinning, de-boning and flavoring machines are coordinated through specialized software to the distribution trucks that deliver the final product to the end customers.
Leading chicken producers use software to track not only the availability of the trucks needed but also the size of the loads already scheduled to ensure every truck is as close to capacity as possible or that rail containers with parts destined for international markets make it to their destination. Then yet another piece of software is used to track and manage the availability of the drivers to guide the chicken parts to the grocery store.
Now, Tyson Foods, and potentially other chicken producers to follow, hope to use online marketplaces to get orders from and products into foodservice operations faster. Tyson also hopes to use the efficient communications of at least one such marketplace, the Electronic Food Service Network, to give it a better handle on how its products are being consumed on college campuses, at restaurants and other dining places. If in these venues it can get the same kind of sales data currently produced by scanners at grocery stores, a producer can better anticipate demand for specific parts and products and use it to better coordinate the growing and processing cycles for chickens.