1. UNFAIR PRACTICES What does it mean when a producer ...

5. REASONABLE NOTICE
How does not getting reasonable notice of a suspension of birds impact poultry
growers?
A grower explained that when he started raising chickens 3 years ago, the integrator with whom
he contracted told him that he would be receiving at least six flocks per year. The first year, he
received 6 flocks. The second and third years, he only received 5. His mortgage payments are
based on receipt of 6 flocks a year, so he has fallen behind on payments. Had he received notice
that he was going to have a longer layout time between flocks, this producer could have talked
with his banker about rescheduling his payments. Some contracts are only for one flock and may
provide for renewal as new flocks are delivered, but do not include any commitment to future
flocks. Others may provide for a specified number of years in which the contract will apply, but
do not establish how long the period between deliveries of flocks may be. This means that the
company has the discretion as to when flocks will be delivered to the grower. When the
companies choose to reduce their production levels due to market conditions or any other factors,
they have the freedom to force longer periods between flocks. As the number of flocks per year
decreases with the longer periods between flocks, growers’ income is reduced dramatically, often
causing them to default on loans and fail to pay their family living and farm operating expenses.
(Rural advocate testimony, hearing of the U.S. Senate Committee on Agriculture, Nutrition and
Forestry, April 18, 2007)