Tyson Foods began as a chicken business, nearly 90 years ago, and today, we are one of the leading supporters of U. S. poultry farmers. We depend on our network of small and independent farmers to supply our plants – and we only succeed when they also succeed.
We have been working with poultry farmers on a contractual basis since the late 1940s. We supply the birds and feed, as well as technical expertise, while the poultry farmer provides the labor, housing and utilities to support the birds. Farmers benefit because it protects them from the risk of changing market prices for chicken and feed ingredients like corn and soybean meal. These are the main costs of raising a chicken. So, farmers’ compensation is not dependent on what the feed costs or prices at the grocery store. This benefits American consumers because the incentive-based pay system helps keep the price of nutritious chicken affordable for millions of families and the foodservice industry.
This system has been successfully helping feed America – and the world – for nearly a century. Today, as demand for chicken goes up, it is to our benefit to help all of our partner farmers deliver healthy birds to help meet this demand. When they succeed, our own business does better. In fact, a 2022 study by Agriculture Economist, Dr. Thomas Elam found that the median income of contract poultry farmers was significantly higher than both all farm households and all U. S. households.
Today, we pay nearly $820 million annually to the more than 3,600 poultry farmers who contract with us. Traditionally, companies like Tyson provide incentives to farmers to deliver safer, healthier and better quality chickens: while every farmer gets paid a base rate, farmers who deliver birds above the average standard can receive a bonus that’s based off a points system. Simply put, Tyson pays more for better performance – a concept shared across many industries.
We know that there are other ways to reward good work, though, so we’ve been testing out different kinds of payment systems. At our facility in Humboldt, Tennessee, for instance, farmers get a base rate that depends on the size of their chicken barns. They can also receive bonuses depending on the quality and efficiency of their flock.
We respect and value the contribution of the farmers we work with, and have detailed guidance for our relationship in the Tyson Foods’ Contract Poultry Farmers’ Bill of Rights, which we launched in in 2018. Highlights include farmers’ right to:
• Information detailing how much they are paid. • Discuss their contract with outside parties, including legal counsel. • A fixed length contract that can only be terminated for cause. • Join an association of contract poultry farmers. • Industry leading poultry welfare standards and training on those standards.
We also established a Contract Poultry Farmer Advisory Council so we could have open, transparent communications between poultry farmers and Tyson. One of the outcomes of this council was the creation of an app that gives farmers access to real time information on when the company will deliver chicks from the hatchery or feed to their farms, allowing them time to properly prepare their facilities for the birds. Video Description: This video features families like Jeremy and Vinh’s, who have been raising chickens for us for generations.
Raising chickens for a living may sound like an idyllic rural lifestyle but the reality of being a contract grower for a major poultry company like Tyson can be quite different. While Tyson chicken farmers can earn a decent income if everything goes well they also face considerable risks and challenges. This article examines how the Tyson chicken growing system works and what a Tyson farmer can realistically expect to earn.
An Overview of Contract Growing
Tyson Foods, the largest meat company in the U. S. , does not own chicken farms. Instead, it hires independent farmers to use Tyson’s methods to raise chickens on their own land. This deal puts a lot of risk on the farmer instead of Tyson.
Tyson provides the chicks feed veterinary care, and transportation. Farmers provide the land, chicken houses, labor, utilities, and equipment. Tyson dictates how the chickens must be raised and handles all processing, marketing, and sales.
Farmers get paid based on how well their flocks do compared to other farmers. Things like weight gain, livability, feed conversion, and condemnations are used to measure performance. Better performers earn more per pound.
The Costs of Chicken Farming
It costs a lot of money to build and run a chicken farm. For a standard-sized farm, it can cost over $1 million. Costs include:
- Land
- Chicken houses
- Equipment like feeders, waterers, generators, lights, ventilation, etc.
- Utilities like electricity, gas, water, etc.
- Labor
- Repairs and maintenance
- Insurance
- Taxes and fees
- Permitting and regulatory costs
Ongoing operating costs like utilities, labor, maintenance, etc. can add up to over $30,000 per flock. A farmer may go through 5–6 flocks a year, since each one only lasts about 6–7 weeks.
Farmers are responsible for financing their operations. Tyson provides no upfront payments. Loans must be repaid regardless of how much income the farm generates.
Revenue Sources and Uncertainty
A farmer’s income potential depends on:
- The base pay rate Tyson sets for their region, typically 4-6 cents per pound
- Performance bonuses or penalties versus other growers, often +/- 2 cents per pound
- The average weight of chickens at processing, around 6 lbs
- The number of chickens placed per flock, often over 30,000
So for example, with a 5 cent base rate, 6 lb chickens, and 32,000 chickens placed, a farmer could earn up to $96,000 per flock, or about $500,000 annually if they consistently max out bonuses.
But bonuses are far from guaranteed. A low performing flock might only earn the base rate, reducing potential income to $75,000 for that flock cycle.
Major problems like disease outbreaks or equipment failures can cause losses of $20,000 or more per flock. And since farmers own the chickens, any losses are theirs alone to bear.
Expenses also fluctuate. Feed, a farmer’s biggest cost, has become extremely volatile. Cost increases can rapidly erase margins.
Is Contract Growing Worth It?
With high fixed costs and variable income, many Tyson farmers struggle to cover their costs and service debts. It can be years before a new farmer generates positive cash flow.
Returns on investment are often below other occupations requiring major capital investments like equipment or real estate.
But chicken farming does allow operators to be their own boss and avoid the instability of many rural jobs. Performance-based pay incentivizes efficiency and productivity.
Overall, contract growing for Tyson can provide a decent living for farmers able and willing to control costs, invest significant capital, and operate efficiently. But it also comes with considerable risk and uncertainty. Careful planning and contingency funding are essential to survive the ups and downs.
Vinh and Jeremy – A Family Farm
We proudly work with thousands of independent poultry farmers across the country every day, bringing quality protein from family farms to family tables. Some families, like Jeremy and Vinh’s, have been raising chickens for us for generations. For them, its more than just a reputation; its about producing good, quality product for the consumer. Vinh says that farming is one of the best choices he’s ever made! Video Description: This video shows a family who grew up farming. They do it because they love it and want to help feed the world.
William and Leah – Feeding the World
William and his wife Leah grew up farming. They know the value of hard work and wanted to pass that on to their kids. Leah is thankful for their working relationship with Tyson and the service techs that assist them daily. For them, farming is a source of pride – a labor of love to help feed the world. Description: Doug and June are in this video. They are part of a family that has been farming for over 40 years.
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FAQ
How much do Tyson chicken farmers make?
Average pay: $24 is thought to be the middle base pay for a Farmer at this company in the United States. 16 per hour.
Do chicken farmers make good money?
Contract Payments: Farmers typically receive a per-bird payment, which can range from $0. 05 to $0. 10 per pound of live weight, depending on the contract terms and regional market conditions. Annual Income: On average, contract chicken farmers in the U. S. may earn between $20,000 to $70,000 annua.
How much do chicken farm owners make a year?
| State | Annual Salary | Hourly Wage |
|---|---|---|
| California | $58,510 | $28.13 |
| Minnesota | $58,066 | $27.92 |
| Rhode Island | $58,060 | $27.91 |
| New Hampshire | $57,656 | $27.72 |
Do Tyson chicken farmers own their own chicken?
More than 3,700 independent farmers raise chickens for us. We supply the birds, feed and technical advice, while the farmers care for the chickens by providing the farm, housing and labor.