SIC 0251 Broiler, Fryer, and Roaster Chickens

Encyclopedia of American Industries | 2005 | Copyright

SIC 0251
BROILER, FRYER, AND ROASTER CHICKENS

This category includes establishments primarily engaged in the production of chickens for slaughter, including those grown under contract.

NAICS Code(s)

112320 (Broilers and Other Meat-Type Chicken Production)

Industry Snapshot

Although the number of poultry farms decreased by half over the last 50 years, output rose dramatically, from about 1.5 billion birds in 1959 to almost 8.0 billion at the turn of the twenty-first century. By 2002 poultry production had exceeded 38 billion pounds, reflecting a 3.2 percent increase from the previous year. Domestic poultry consumption grew 5.7 percent in 2002 to nearly 76 pounds.

The industry survived the late twentieth century recession reasonably unscathed. In the early 1990s, it had benefited from unprecedented consumer demand for poultry. In 1992 sales of chicken had outstripped those of red meat for the first time. By 2002, chicken accounted for a 41.7 percent share of the meat market.

Chicken was also being marketed more widely, particularly in fast food restaurants. Between 1970 and 1990, about 25,000 outlets introduced chicken in the form of sandwiches or nuggets, and these numbers continued to grow into the twenty-first century. There was also steady growth in the number of specialist fast food chicken chains, such as KFC and Church's Fried Chicken. The broiler, fryer, and roaster industry and the fast food industry have worked closely together to develop products especially for these markets.

Organization and Structure

In the early 2000s, 7 to 10 companies controlled about 50 to 60 percent of the chicken market. These were vertically integrated concerns—companies with control over every stage of poultry growth and production from egg production to broiler slaughter.

By the start of the twenty-first century, independent farmers under contract to large poultry companies grew 89 percent of the chickens, a 10 percent decrease from the mid-1990s. The remainder were farmed directly by the companies themselves. Under the contract system, the company provided the chicks, feed, medication, and transportation to market. The farmer furnished the housing, equipment, labor, and miscellaneous supplies, and agreed to raise the birds until slaughter. Farmers were generally paid according to how much feed was needed for the birds to achieve market weight. The less they needed, the cheaper the chickens were to produce and the more farmers earned.

Background and Development

Broiler production increased from 34 million in 1934 to approximately 6 billion in 1990. Output has increased in all but...

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