How Much Does a Tyson Chicken Farmer Make?

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 contracts with independent farmers to raise chickens on their farms using Tyson’s methods. This arrangement shifts much of the risk from Tyson to the farmer.

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 earn income based on how well their flocks perform versus other growers. Performance is measured by factors like weight gain, livability, feed conversion, and condemnations. Better performers earn more per pound.

The Costs of Chicken Farming

Building and operating a chicken farm requires a substantial upfront investment, often over $1 million for a standard sized farm. 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. And since each flock only lasts about 6-7 weeks, a farmer may go through 5-6 flocks per year.

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.

Do you get a good deal as a Poultry Farm ?