Nebraska Farmers Union (NeFU) President John Hansen reported that the four public information meetings his organization co-sponsored with the Organization for Competitive Markets, Farm Aid, Nebraska Communities United and GC Resolve last week were well attended and constructive. A total of two hundred people attended the meetings held in West Point, Columbus, Wahoo, and Arlington.
“Farmers, bankers, and members of the community came together to hear from two nationally recognized experts on poultry contracts. Lynn Hayes has been providing legal assistance to contract poultry growers in trouble for 25 years. Very few lawyers have that amount of background and experience. Mike Weaver is a long-term contract producer and President of the Contract Poultry Growers Association of the Virginia’s. His honest, straight-forward approach is well respected.
The well-known and long-standing problems with traditional poultry industry contracts were identified and discussed. “Hopefully, the more problems that are identified, the more remedy is possible,” Hansen said. “It is essential that contract producers understand all the risks and obligations that go with poultry production so those issues are properly addressed in the binding contracts they will be asked to sign. Our goal was to help farmers gather more information so they could know more about what goes with poultry production issues and poultry contracts.”
Hansen noted that Costco’s good reputation was cause for optimism, but based on the history and practices of the poultry industry, openly sharing the particulars to be addressed in the contracts is warranted. “The contracts determine all of the production particulars, liabilities, obligations, and revenues. “What might be a good deal for the ag bankers might not be such a good deal for the farmers,” Hansen said. “This would not be the first time our banker friends shopped around ventures that worked far better for them than it did for farmers.”
“The draft pro forma financial documents being circulated are far from complete or accurate. They do not include costs for labor, a litter storage building, a shed for the electrical generator, specialized equipment for the bedding, or the professional costs for obtaining as well as farmer costs for complying with local zoning permits and state Title 30 livestock waste permits,” Hansen said. “The rate of return to farmers drops quickly when including those costs.”
“These meetings were designed to start the conversation in the ag community on what farmers need to have and need to avoid in poultry contracts. Since there is no broiler market, the poultry market determines how much farmers get paid for their work, risk, and capital investment. Hopefully, farmers will work together to share information for their mutual benefit. Since our farmers have little or no experience with poultry contracts, information sharing is essential,” Hansen said. “NeFU has experience in working with landowners with wind contracts and oil pipeline easements. The more farmers work together and share information, the better it is for everyone. Our organization is a service organization for farmers. We are glad to be of assistance.”