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Estimated Returns for Contract Broiler Production in Arkansas, Missouri, and Oklahoma: Historical and Future Perspectives

H. L. Goodwin, Jr.^*, B. L. Ahrendsen^*, T. L. Barton and J. H. Denton

^* Department of Agricultural Economics and Agribusiness, University of Arkansas, 217 Agriculture Building Fayetteville, Arkansas 72701;
Department of Poultry Science, and
Center of Excellence for Poultry Science, University of Arkansas, POSC O-114 Fayetteville, Arkansas 72701

Correspondence: H. L. Goodwin, E-mail: haroldg{at}uark.edu

Nearly all broilers produced in the United States are grown under contract arrangement between independently contracting broiler producers and integrated poultry companies. These contracts may vary in some minor points, but all include general provisions stipulating that the integrators are responsible for chick placement, feed provision, and live hauling of slaughter weight broilers (weights and age to be determined by the integrators) with growers providing the housing and equipment (as specified by the integrators), labor, utilities, and management expertise, with periodic consultation by the integrator service personnel. From time to time, it is desirable to look at this production system and compare current structure, costs, and returns with those from past years. The Poultry Federation (comprised of poultry firms in Arkansas, Missouri, and Oklahoma) Board of Directors commissioned a study in June 1999 to be conducted later that year to quantify changes that occurred in the structure, costs, and returns in the region's broiler industry during the period 1979 to 1999. Persons considering either entering the broiler business or seeking to expand existing operations can use these results. Lending institutions can use results in evaluation of loan applications for enterprise establishment or expansion. Broiler producers and integrated poultry companies can also use these results to compare costs and returns with past years and evaluate both the future state of the existing industry and opportunities for expansion.

Key Words: grower returns • poultry economics • broiler contracts