Few contract growers are young, especially compared to the population of household heads in the United States: their average age is 55, and only 4 percent are younger than 35. They are geographically concentrated, in that most are located in rural areas in the South. The farms tend to be rather specialized, with a focus on growing broilers. They have a common occupation-growing broilers under contract-and 85 percent of their farms are small, with sales of less than $350,000. In contrast, contract broiler growers comprise a much more uniform group. population encompasses a wide range of ages, occupations, regions, and levels of education-all things that affect earnings. Researchers expected to see a wide range of incomes among all U.S. Therefore, the spread between the 80th and 20th percentile incomes was much greater for contract broiler growers than for all farm households or all U.S. But the 20th percentile value ($18,782) was less than the corresponding values for the other comparison groups.
Census Bureau.Īmong contract broiler growers, the 80th percentile of household income was $143,294- greater than the 80th percentile values for all farm households and for all U.S. The 80-20 range captures the range of incomes earned by the middle 60 percent of households the estimates are calculated using farm household data available from USDA’s Agricultural Resource Management Survey and data for all households reported by the U.S. Correspondingly, 20 percent of households earn less than the 20th percentile income, and 80 percent earn more. Twenty percent of households have incomes above the 80th percentile, while 80 percent realize incomes below that level. ERS analysts measured the spread of household incomes by comparing incomes at the 80th and 20th percentiles of the income distribution. The spread of household incomes was also much greater among contract growers. Sixty percent of contract broiler growers earned household incomes that exceeded the U.S.-wide median.ĭownload larger size chart (577 pixels by 531, 72 dpi) The median for contract broiler growers was higher, at $68,455.
households was $50,504, while the median income among farm households was $57,050. In 2011, the median income among all U.S. For farmers, household income combines the income that the household receives from off-farm activities with the income that the household receives from the farm business, net of expenses and payments to other stakeholders in the business.ĮRS researchers compared average incomes using the median, at which half of households earn less and half earn more. Household income measures the cash income flowing to a household and available for expenditures during a year. The contracts limit some market risks that growers might face, but introduce other risks. While most farms have maintained long-term relationships with their integrator, the actual contracts frequently cover short durations and only limited commitments for the placement of flocks. Contract growers make a substantial and long-lived investment in broiler housing, usually financed by borrowing from commercial banks or the Farm Credit System. Most of the farms are small and focus on broiler production, and contract fees account for the bulk of the farms’ gross income. They receive chicks, feed, transportation, veterinary services, and technical guidance from integrators, who pay contract fees to the growers to raise the chicks to market weights. The farms provide capital (housing and equipment), utilities, and labor. Almost all broilers are raised by farms that operate under contract with chicken companies known as integrators. broiler production is organized in a distinct manner. The reasons are partly due to the way broiler production in the United States is organized and the way broiler producers are typically paid for their services. However, averages don’t tell the whole story the range of household incomes earned by broiler growers is also wider than other groups, reflecting the financial risks associated with contract production. Households that raise broilers realize higher average incomes than other farm households and other U.S. The range of income reflects, in part, the risks of contract production while contracts are designed to remove or reduce certain financial risks, they introduce other risks, and the payments that growers receive for raising broilers can vary widely.
households.Ĭontract growers’ incomes cover a wider range than the incomes of all farm and all U.S. Contract broiler growers earn average household incomes that substantially exceed those of all farm and all U.S.
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