Poultry Industry Not Immune to Impact from COVID-19

Aug 25, 2020

By Katie Nichols and Justin Miller

Poultry producers are used to preparing for the unknown. Even with COVID-19, producers are having to keep a close eye on many aspects that could affect them.

Dennis Brothers, an Alabama Extension associate professor of agricultural economics, said there is no doubt that many operations could feel some impact from this situation.

“In our industry, the contract poultry grower often feels left out of the conversation,” Brothers said. “It is in a grower’s best interest for them to be aware of the current situation and also know the potential financial impact it may have on their operation.”

A recent survey conducted by Alabama Extension and Auburn University professionals asked producers in the ag industry to examine their total sales revenue since the coronavirus began impacting them and compare it with that same time period in 2019. Poultry producers reported a decline in total sales revenue.

“Contract poultry growers need an action plan to secure their livelihood in the event something major happens to the industry,” he said. “Working with their lenders as well as knowing the government programs available are important steps to preparing for the future.”

Available Lending Options for Growers

Agriculture lenders are eager to help growers make the right choice for their poultry operations. The right course of action will vary on an individual basis and thoughtful planning is essential.

“There will likely be some production losses affecting growers,” Brothers said. “This could be as little as a few extra days out time between flocks, which is likely the case in much of Alabama, up to the equivalent of an entire flock lost in a year’s time.”

During such interruptions in normal business operations, lenders can assist with proper management of the existent cash flow and expenses. Brothers said loan restructures, deferrals and extensions on payments are all ways lenders can potentially help growers secure their businesses.

Government Program Options

Poultry growers who do not own the birds they are growing currently do not qualify for assistance through the USDA’s Coronavirus Food Assistance Program (CFAP). Brothers said efforts are under way to include contract growers specifically in future USDA assistance programs. However, there are still other program options for poultry producers to consider.

“Perhaps the most important support program for growers to investigate is the Small Business Administration’s (SBA) Debt Relief program,” Brothers said. “The Paycheck Protection Program may also be applicable for growers.”

Growers should contact their lenders and consult their accountant for further guidance on these programs.

Source : aces.edu

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