Chicken Processing In The Us: A Competitive Landscape

The chicken industry in the US is thriving, with Americans consuming over 8 billion chickens per year. There are 2,979 federally inspected chicken processing plants in the US, though there are likely many more chicken processing companies. The number of meat, beef, and poultry processing businesses in the US grew by 0.5% from 2018 to 2023, reaching 5,524 businesses in 2023. Most poultry in the US comes from a few major producers, such as Tyson Foods, Pilgrim's Pride, and Perdue Farms.

Tyson Foods, Pilgrim's Pride, and other major chicken processors

The US chicken industry is thriving, with an inventory of over 500 million chickens and 224 million turkeys. The poultry sector recorded sales of $76.9 billion in 2022, a 67% increase from the previous year.

Tyson Foods is the largest poultry producer in the United States, with a market share of approximately 25%. The company produces a wide range of poultry products, including chicken, turkey, and duck. Tyson Foods has a growing portfolio of protein-centric brands, offering nutritious and delicious options. With sales of over $42 billion, Tyson dominates the chicken market in the US.

Pilgrim's Pride Corporation is the second-largest poultry producer in the US, with a market share of approximately 20%. The company has about 38,000 employees and distributes its products primarily through foodservice and retail outlets. Pilgrim's Pride is vertically integrated, meaning it has its own divisions for every process from "egg to table". The company supplies poultry products to major brands like Walmart, Publix, and Wendy's.

Other major chicken processors in the US include Sanderson Farms, Perdue Farms, Foster Farms, Koch Foods, and Wayne Farms. Sanderson Farms is the third-largest poultry producer, with a market share of about 8%. Perdue Farms, the fourth-largest producer, has a market share of around 7%. These companies, along with Tyson and Pilgrim's Pride, contribute significantly to the US poultry industry, which is a major employer, providing jobs for over 590,000 people in 2019.

Small-scale chicken processors for independent farmers

The US chicken industry is thriving, with an inventory of over 500 million chickens and sales of over $42 billion. However, most chicken farmers in the US work under contract with large brands, leaving few independent chicken farmers. As a result, there are only a small number of small-scale chicken processors for independent farmers.

A source states that there are only about a dozen small-scale USDA-inspected poultry processors in the country that process for independent farmers. However, there are other options for small-scale farmers, such as mobile processing units (MPUs) and on-farm processing. MPUs are basic, economical units that can be housed on an open-air flatbed trailer and provide equipment for processing a modest number of chickens. They are especially useful for people who only occasionally slaughter chickens, such as when a flock of laying hens has aged beyond productivity. MPUs can be rented from a small number of producers, such as Cornerstone Farm Ventures of Norwich, New York.

On-farm processing is another option for small-scale farmers, although it is not legal in all states. Some states allow a defined number of birds to be processed on the farm of origin without federal inspection, but the number of birds and places the poultry can be sold is limited. For example, Anne Gordon, a backyard chicken owner, has set up a small-scale processing kitchen with National Science Foundation (NSF) stainless steel equipment. This allows her to process broilers without meat inspections for Farmers Market customers.

Small-scale chicken processing can be challenging, with considerations such as cost, equipment, permits, and manpower. However, with options like MPUs and on-farm processing, small-scale farmers can find profitable solutions for their poultry operations.

The rise of chicken processing companies like Koch Foods

The US chicken industry is thriving, with an inventory of over 500 million chickens and sales of $76.9 billion in 2022. The average American consumes 87 pounds of chicken each year, a number that has been increasing as the appetite for beef and pork has decreased. This shift in consumer preferences has contributed to the rise of chicken processing companies like Koch Foods.

Koch Foods is the sixth-largest poultry producer in the United States, with a market share of approximately 4%. The company primarily produces chicken products, including buffalo wings, chicken strips, and chicken nuggets, which it supplies to major companies like Walmart, Burger King, Kroger, and Aldi. Starting as a one-room chicken processing facility in 1973, Koch Foods has expanded into a profitable business with locations in six states.

The growth of Koch Foods can be attributed to several factors. Firstly, CEO Joseph Grendys shifted the company's focus to processing boneless chicken breasts when the menu item was gaining popularity. This strategic decision allowed Koch Foods to capitalize on the rising demand for convenient and versatile chicken products. Additionally, Grendys took advantage of low valuations in the poultry industry due to avian flu scares and made several strategic acquisitions. He acquired kill plants, deboning facilities, and smaller poultry processors, integrating these operations into Koch Foods' vertically integrated business model.

However, Koch Foods has also faced controversies and legal issues. The company has been accused of discriminating against black contract farmers and retaliating against those who spoke out. In 2012, the U.S. Equal Employment Opportunity Commission filed a lawsuit against Koch Foods alleging harassment and discrimination based on national origin and race at its Mississippi plant. Federal authorities also raided several of Koch Foods' chicken processing plants in Mississippi and Ohio, detaining hundreds of undocumented workers. Despite these setbacks, Koch Foods has continued to grow and expand, solidifying its place as one of the leading chicken processing companies in the United States.

The top chicken processors by market share

The US chicken industry is thriving, with an inventory of over 500 million chickens and 224 million turkeys. The US is the second-largest exporter of poultry, with a lot of its chicken being eaten domestically.

Tyson Foods, Inc.

Tyson Foods is the largest poultry producer in the United States, with a market share of approximately 25%. The company produces a wide range of poultry products, including chicken, turkey, and duck. In 2015, Tyson Foods achieved record earnings and sales, earning $3.15 per share and posting $40.6 billion in sales. They have also expanded their business model to include more consumer food products, purchasing more chicken from other producers.

Pilgrim's Pride Corporation

Pilgrim's Pride is the second-largest poultry producer, with a market share of approximately 20%. They specialise in chicken production but also produce other poultry products. Pilgrim's Pride is one of Tyson Food's closest competitors and grew its chicken production in 2015.

Sanderson Farms, Inc.

Sanderson Farms is the third-largest poultry producer, with a market share of approximately 8%. They primarily produce chicken products but also offer other poultry options. In 2015, they increased their RTC chicken production by 12.6%, focusing on a build-and-grow strategy to keep costs competitive.

Perdue Farms

Perdue Farms is the fourth-largest poultry producer, with a market share of around 7%. They produce a wide range of poultry, including chicken, turkey, and duck. In 2015, they slaughtered 12.99 million broilers weekly, producing 61.74 million pounds of chicken, an increase of 9.3% from the previous year.

Foster Farms

Foster Farms is the fifth-largest poultry producer, with a market share of about 4%. They mainly produce chicken products but also offer other poultry options.

Koch Foods

Koch Foods is the sixth-largest poultry producer, with a market share of roughly 4%. They primarily produce chicken but also offer other poultry products. Koch Foods started as a one-room chicken processing company in 1973 and has since expanded to six states.

Wayne Farms LLC

Wayne Farms is the seventh-largest poultry producer, with a market share of about 3%. They produce chicken and other poultry products. Wayne Farms has been operating since 1965 and covers all steps of poultry production, including hatcheries, feed mills, and processing facilities.

Cargill Meat Solutions

Cargill is a major player in the meat industry, raising and processing poultry for sale to consumers and food companies. They have a diverse range of services and products, including beef, turkey, and food distribution. Cargill is reported by some sources to be the largest poultry company in the US, with $165 billion in sales and a market share of 22%.

Bell & Evans

Bell & Evans is the tenth-largest poultry producer, with a market share of approximately 1%. They mainly produce chicken products but also offer other poultry options.

The number of chicken processing plants in the US

The chicken industry in the US is thriving, with an inventory of over 500 million chickens. In 2024, the number of meat, beef, and poultry processing plants in the US stood at 5,467, a decrease of 1% from the previous year. However, according to another source, there are 2,979 federally inspected chicken processing plants in the US.

The US poultry industry has a market size of $57.8 billion as of 2023, with Americans consuming over 8 billion chickens annually. The largest poultry company in the US is Cargill Meat Solutions, with sales of $165 billion and a market share of 22%. Other major players in the industry include Tyson Foods, Pilgrim's Pride Corporation, Sanderson Farms, Perdue Farms, Foster Farms, Koch Foods, and Wayne Farms.

Tyson Foods dominates the chicken market in the US, with sales of over $42 billion. Fresh and processed chicken meat are their largest product categories. The US exports 565,000 lbs of turkey products annually, with Mexico being the top destination.

Starting as a small chicken processing company in 1973, Koch Foods has expanded into multiple states and become a highly profitable business. Wayne Farms, founded in 1965, covers all aspects of poultry production, including hatcheries, feed mills, farms, and processing facilities.

There are a limited number of independent chicken farmers and USDA-inspected poultry processors in the country. Building and operating a USDA-inspected plant is a significant undertaking, with high costs and lengthy timelines to break even.

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