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House of Raeford Pulls Out of Commodity Turkey Business

18 March 2013

US - US integrated poultry processor House of Raeford Farms is to pull out of the commodity turkey business.

The company has announced it will focus its resources on increasing chicken production volumes and expanding its fully cooked turkey and chicken product lines over the next two to three years, phasing out its commodity turkey growing and slaughter operations in eastern North Carolina.

This decision will see the closure of its Rose Hill, North Carolina turkey hatchery, Raeford, North Carolina turkey slaughter plant, and turkey growing operations in eastern North Carolina over the next four to six months.

The company will continue to operate its Raeford, North Carolina cook plant and will expand its production of fresh ready-to-cook chicken, tray pack ground turkey and chicken, battered and breaded nuggets and patties, and fully cooked turkey and chicken products.

Implementation of this decision will have a positive operational impact on current House of Raeford chicken operations.

Over the past decade, growth in chicken operations has already transformed House of Raeford into one of the nation’s top 10 chicken producers and processors.

The effect of high corn prices caused by government ethanol mandates has driven feed costs higher. The turkey industry has experienced multiple years of flat to declining per capita turkey consumption, yet forecasts predict production volume increases over the next two years. These factors, combined with rapidly falling commodity turkey prices and historic and projected losses, contributed to the company’s decision.

By contrast, the company’s chicken business – which now represents over 90% of sales – has grown considerably.

“We intend to further expand the chicken business over the next two to three years so that our increased chicken volume will replace the turkey production we are phasing out,” said Bob Johnson, CEO of House of Raeford.

“This expansion will provide opportunities for as many of our growers and employees as possible to transition into the chicken business."

House of Raeford said it will proactively assist all employees affected by this decision by offering severance packages, priority employment opportunities at other plants, and community transition services such as job placement counseling and retraining.

Management will also begin working with individual turkey growers to determine interest in transitioning their turkey farm operations into chicken operations.

“We’re grateful to the employees and growers, who have been an active part of our turkey operation and we are committed to helping each one of them during this transition,” said Mr Johnson.

The Raeford, North Carolina turkey slaughter plant, which will be idled after producing holiday turkeys for customers, currently employs 950 workers. The Rose Hill, North Carolina turkey hatchery currently employs 30, most of whom will be offered jobs at other company facilities in the surrounding area.

The Raeford, North Carolina cook plant, which will remain open, currently employs 400 workers. This decision will not affect the cook plant or the remaining 5,300 House of Raeford employees, of which approximately 2,300 are employed in North Carolina.

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