Thursday, September 21, 2023

How is the nation’s labor shortage affecting the poultry industry?

By David B. Strickland, Poultry Times editor,

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GAINESVILLE, Ga. — Just as there is a great demand for chicken products right now, there is also a significant need for workers in the poultry industry.

The “chicken sandwich wars” call for chicken wings and other new products. Winter storms and the global pandemic have all had their effects on the production of chicken products. But like several industries nationwide, the poultry industry also must maintain a large workforce to meet all these needs to keep America’s No. 1 protein on people’s plates.

“Like most industries in the United States right now, chicken processors are grappling with a tight labor supply,” said Tom Super, senior vice president of communications with the National Chicken Council. “But labor challenges are nothing new to our industry — processors have been adapting to meet those challenges for years.”

Tyson Foods, which is one of the world’s largest food-producing companies, shared the disruptions it felt from recent conditions in its latest quarterly financial report.

Tyson’s chicken segment saw a decrease in volume in the second quarter of 2021 as a result of, “lower production throughput associated with COVID-19, disruptions due to severe winter weather, decline in hatch rate and a challenging labor environment,” the company said.

“We will remain focused on the factors we can control and will continue to work diligently for a full recovery of our chicken business while delivering strong results in other areas of our company,” Dean Banks, Tyson Foods president and CEO, said in the report. “Our long-term outlook is bright as global protein consumption continues to grow, and we expect our investments in capacity expansion, product innovation and technology to create sustainable shareholder value.”

There will continue to be a shift toward automation in the processing industry to meet demand for product and to supplement for worker loss.

It has been reported that Pilgrim’s Pride remarked in a recent conference call that it plans to spend upward of $100 million during the next several years to invest in robotics and further automated operation systems.

Pilgrim’s Pride CEO Fabio Sandri added during the conference call that the company is “… staffed less than we were even before the pandemic … The labor market today seems tighter than the one we had when we were in full employment mode.”

Processing companies are also trying several incentives beyond just wage increases to bring workers into the industry.

Super added: “Processing plants have been embracing more automation, offering more competitive wage rates and attractive benefit packages, creatively managing shifts, offering flexible work schedules, and hosting job fairs, all in an effort to attract more workers.”

Several states, including Georgia, are beginning to make moves toward eliminating unemployment supplements and requiring those without jobs who are receiving benefits to provide proof they are looking for employment. Many of these requirements were temporarily lifted during the pandemic.

“Congress, governors and the administration must focus its efforts on fixing the broken unemployment insurance program to ensure the system does not discourage recipients from finding work,” said Greg Ferrara, National Grocers Association president, in a letter to President Biden. “While unemployed Americans certainly need a safety net as they try to get back on their feet, the benefits of combined unemployment and stimulus policies should not meet or exceed prior compensation, or businesses will be competing with the government for labor.”

Ferrara added that the grocery and supermarket industry struggled to meet the same needs as the poultry industry in regard to large consumer demand for product, combined with an increase of health and safety protocols.

“Given these challenges, the industry has responded by increasing employee pay, providing additional overtime opportunities and offering bonuses,” he said in his letter. “Despite these efforts, the industry is at a crisis point in its struggle to find qualified employees and keep grocery stores operational for hungry consumers.”

The U.S. Department of Labor’s Bureau of Labor Statistics in its most recent release reported a decline in employees in food and beverage stores by 49,000 in April 2021. The BOLS also notes the unemployment rate at 6.1 percent, with 9.8 million unemployed persons. The department adds that these numbers are lower than April 2020, but still above pre-pandemic levels.

The National Grocers Association added that through a recent member survey that all its respondents reported challenges with labor and workforce as being more significant in the past two months. The association has been assisting with recruiting needs and providing tips through its online career center.

“Although these efforts have led to some modest improvements, we need the support of our federal and state government officials to make solving this problem as urgent of a priority as we are,” Ferrara wrote in his letter to the president. “It is simply impossible for grocers who exist on razor-thin profit margins to compete for work when the government is paying workers to stay home.”

The poultry industry has stepped up efforts to meet the demand of product — not just for the “chicken sandwich wars” but across the board. The efforts are showing results as poultry production is steadily increasing.

“Based off the most recent USDA data, it seems some of these strategies are paying off,” Super said. “The week ending May 22 saw a 4 percent increase in production versus the same time a year ago.”

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