Feasibility research report for insuring commercial poultry production

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SECTION IV. TURKEY SECTORThe United States is the world‘s largest producer of turkeys. U.S. turkey production reached 7.9billion pounds (live weight) in 2008, with a total estimated farm-gate value of almost $4.5billion. 69 While most U.S. produced turkey is consumed domestically, the U.S. exports moreturkeys and turkey products than any other country. Brazil, with the second largest production,harvested 1.1 billion pounds of turkey and Canada harvested 378 million pounds in 2008, whilethe European Union-27 collectively produced 6.6 billion pounds. 70 The average estimated pricereceived by U.S. producers during 2008 was almost 57 cents per live-weight pound. 71U.S. per capita consumption of turkey has increased from 0.8 pounds in 1910 to 13.6 pounds in2007. This reflects the evolution from a seasonal market (between Thanksgiving and New YearsDay) for a single-turkey product (whole birds), to a year-round, diversified, value-added productline. Nonetheless, the whole turkey continues to be the most popular turkey product, although itssale is no longer associated solely with the holiday season. The structure of the turkey sector,with a wide variety of processed products, has changed turkey production into a year roundactivity.The average retail price for whole frozen turkeys in the United States in 2008 was $1.25 perpound. 72 Many processed turkey products have a substantial value added component. A reviewof internet grocery store prices shows some of these products retail at prices in excess of $9.00per pound. Smoked and roasted turkey lunchmeats; ground breast meat; pre-roasted and ready toroast turkey rolls; heat-and-eat turkey dinners; and turkey sausage, hot dogs, ―bacon,‖―pastrami,‖ and ―ham‖ illustrate the breadth of turkey products currently available.In 2008, the United States exported almost 675 million pounds of turkey and turkey products (up24 percent from 2007), valued at $481.9 million (up 21percent). The majority of exported turkeyproducts are lower value parts (drumsticks, feet, wings, gizzards, livers, and hearts) and ground,mechanically-de-boned meat. In 2008, Mexico was the biggest market for U.S. turkey,accounting for over half of U.S. exports. The same year China imported almost $40 millionworth of turkey meat, Canada $25.2 million, and Russia $23.4 million (a slight decrease over theprevious year). 73 Imports to Mexico were up 36 percent from a year earlier; Chinese importswere up 82 percent; and Canadian imports were up 2 percent. Many importers of U.S productionuse turkey meat with other meats to produce sausage. Competition from exporters of turkeys andturkey products, particularly from Brazil, is likely to slow the growth of U.S. turkey exports.69 USDA, RMA, 2009, Poultry - Production and Value, 2008 Summary,http://usda.mannlib.cornell.edu/usda/current/PoulProdVa/PoulProdVa-05-29-2009.txt, accessed April, 2010.70 Marsh Laux, Agriculture Marketing Resource Center, 2009, Turkey Profile,http://www.agmrc.org/commodities__products/livestock/poultry/turkey_profile.cfm, accessed April, 2010.71 USDA, RMA, 2009, Poultry - Production and Value, 2008 Summary,http://usda.mannlib.cornell.edu/usda/current/PoulProdVa/PoulProdVa-05-29-2009.txt, accessed April, 2010.72 National Turkey Federation, 2009, Turkey Industry Structure, http://www.eatturkey.com/consumer/industry/industry.html,accessed April 2009.73 Marsh Laux, Agriculture Marketing Resource Center, 2009, Turkey Profile,http://www.agmrc.org/commodities__products/livestock/poultry/turkey_profile.cfm, accessed April, 2010.Use or disclosure of information or datacontained on this sheet is subject to therestrictions on the title page of this report.47Risk Management AgencyContract No: N10PC18148
IV.A. The CropTurkeys are large birds in the order Galliformes, genus Meleagris. In the United States, turkeysare raised only for meat (i.e., not for table eggs). Turkey meat is relatively lean when comparedto the meat of other domestic poultry species. The domesticated turkey is a descendant of theWild Turkey, Meleagris gallopavo. The dominant commercial breed of turkeys in the UnitedStates is the Broad-breasted White (similar to ―White Holland‖, but a distinct breed). Mostcommercial breeds have been selected for size as well as meat types and distribution. U.S.producers raise over 250 million turkeys annually, 74 generally with live weights of between 25and 30 pounds.Heritage breeds more closely resemble their wild ancestors and can breed naturally. Heritageturkey breeds include Beltsville Small White, Black Spanish, Bourbon Red, Chocolate, JerseyBuff, Lavender/Lilac, Narragansett, Royal Palm, Slate, Standard Bronze, White Holland, andWhite Midget. 75 These niche market birds command less than one percent of the U.S. market. 76While these breeds were originally selected for flavor and productivity (i.e., conversion of feedto meat), they require more time to reach maturity than does the Broad-breasted White and areless amenable to production in houses.As with many Galliform species, the turkey hen (female) is smaller than the tom (male). Bothhens and toms are raised commercially. Hens are more likely to be marketed after slaughter andprocessed as whole birds. Toms are more likely to be processed into turkey products, such aslunchmeats, or sold to restaurants and food services. Parts from both hens and toms may bediverted to export markets. Mature Broad-breasted White toms are so large they are not able tofertilize hens naturally. Consequently, semen is collected from toms and hens are inseminatedartificially. Many hens can be inseminated from each collection, so fewer breeding toms thanhens are required. The meat from culled breeders is used primarily in processed meat products.In commercial production, turkey brood farms supply eggs to hatcheries, which may hatch eggsfrom other species as well. After approximately 28 days, the hatched turkey poults are sexed,boxed, and shipped to the grow-out facilities (a collection of turkey ―houses‖). At thesefacilities, hens are raised separately from toms due to their different growth rates. Rations forboth sexes and all age cohorts generally include corn meal and soybean meal with addedvitamins and minerals. The feed mix is amended to achieve protein, carbohydrate, and fat levelsappropriate for the age cohort.Most turkey grow-out facilities raise 50,000 to 75,000 birds 3.5 times per year (175,000 to morethan 260,000 birds a year). Many of the larger facilities have a single structure (the brood house)with the capacity to house as many as 100 thousand poults. Poults are raised with an averagedensity of one square foot per bird. Each of these brood houses generally serves two grow-outhouses. Consequently, seven broods can be raised in a year to produce the livestock for 3.574 USDA, NASS, 2010, US Turkeys Raised 1959-2009, http://www.nass.usda.gov/Charts_and_Maps/Poultry/tkyprd.asp,accessed March, 2010.75 Heritage Turkey Foundation, 2008, What is a Heritage Turkey, http://heritageturkeyfoundation.org/, accessed April, 2010, andAmerican Livestock Breeds Conservancy, 2009, Breed Information – ALBC Conservation Priority List, http://www.albcusa.org/cpl/wtchlist.html#turkeys,accessed April, 2010.76 Biozine, 2008, Raising Turkeys from Thanksgivings Past,http://biologybiozine.com/articles/feature/raising_turkeys_from_thanksgiv_1.php, accessed March, 2010.Use or disclosure of information or datacontained on this sheet is subject to therestrictions on the title page of this report.48Risk Management AgencyContract No: N10PC18148
Page 1 and 2: Feasibility Research Report for Ins
Page 3 and 4: Table 17 Top Ten States Number of F
Page 5 and 6: producers fully capable of covering
Page 7 and 8: SECTION II. INTRODUCTIONThe Stateme
Page 9 and 10: The turkey sector has an annual val
Page 11 and 12: integrator might be construed as an
Page 13 and 14: emanate from the fact that animals
Page 15 and 16: Meaningful analysis of contract ter
Page 17 and 18: Intense competition within the poul
Page 19 and 20: a market risk faced by an industry
Page 21 and 22: Animal Protein Free Certification P
Page 23 and 24: Emergency Assistance for Livestock,
Page 25 and 26: Environmental Protection AgencyPoul
Page 27 and 28: terms of the policies are considere
Page 29 and 30: The perils affecting production mus
Page 31 and 32: Moral hazards must be avoidable or
Page 33 and 34: III.A. The CropModern commercial br
Page 35 and 36: Table 6. Economic Indicators-Broile
Page 37 and 38: III.C. Stakeholder InputThe Contrac
Page 39 and 40: summary of the crop insurance devel
Page 41 and 42: integrators and with one exception
Page 43 and 44: In past years, concerns tied to the
Page 45 and 46: individual grower‘s performance i
Page 47 and 48: further. Similarly, risks arising f
Page 49: Many growers considered power loss
Page 53 and 54: Free-range birds represent a small
Page 55 and 56: level cash receipts of almost $4.5
Page 57 and 58: include number of growers or county
Page 59 and 60: Follow up InterviewsFollowing the l
Page 61 and 62: The attendees expressed concern rel
Page 63 and 64: Retail to consumer spreads for turk
Page 65 and 66: Poultry Improvement Plan (NPIP). Fe
Page 67 and 68: producing companies with flocks of
Page 69 and 70: Table 14. 2008 United States Egg Pr
Page 71 and 72: heavy broiler and lighter layer sto
Page 73 and 74: The integrated firms are attempting
Page 75 and 76: Although the feed cost differences
Page 77 and 78: Fayetteville, ArkansasThe session i
Page 79 and 80: and processing. The USDA ERS Poultr
Page 81 and 82: subscription. While none of these s
Page 83 and 84: WeatherHeat stress is no longer rep
Page 85 and 86: SECTION VI. FEASIBILITY ASSESSMENTP
Page 87 and 88: a fixed processing charge by sector
Page 89 and 90: Contain underwriting, rating, prici
Page 91 and 92: Appendix AGrower Contract Transpare
Page 93 and 94: terms of the poultry growing arrang
Page 95 and 96: furnished by each party, the durati
Page 97 and 98: poultry growing arrangements after
Page 99 and 100: party to the other at least 90 days
Page 101 and 102:
amendment regarding the timing of t
Page 103 and 104:
Another factor, however, which is i
Page 105 and 106:
§ 201.100 Records to be furnished
Page 107 and 108:
Appendix BListening Session AgendaU
Page 109 and 110:
Appendix CNASS Poultry MethodologyU
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Feasibility research report for insuring commercial poultry production

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