What you need to know about Tyson’s former contract growers

Farmers who raise chickens for Tyson Foods are stuck with mountains of debt after the company closed six chicken processing plants across the country in 2023.

Here are the five major takeaways from this story:

Chicken farmers often have large amounts of debt. Former Tyson contract growers who spoke to Investigate Midwest said they have had to take out upwards of $2 million loans to become Tyson contract growers. These loans are used to build or purchase chicken barns to grow chickens under contract for Tyson, a common practice across the poultry industry. The cost of raising chickens increased 35% from 2012 to 2022. In Arkansas and Missouri, states where Tyson closed four plants last year, the amount of debt held by poultry growers has skyrocketed. From 2003 to 2022, Arkansas poultry grower debt tripled; in Missouri, the figure increased six-fold.

Despite rising costs and debt loads, growers said Tyson continued to ask for upgrades and investments or they would lose their contracts. Often, poultry companies will require or strongly encourage growers to upgrade their barns and equipment in order to get more birds to raise. The USDA estimates that it costs roughly $400,000 to build a new chicken barn, with many growers having multiple barns.

Former Tyson growers said the company promised they would get enough chickens to pay off loans. These growers were offered contract buyouts but stated it would not be enough to cover all of their debt. An Arkansas grower had less than a year left on his contract when it was canceled by Tyson. This grower still holds $1.4 million in debt and is facing bankruptcy. A grower in Missouri said he has millions of dollars in debt left on his chicken barns. He raised more than a million birds for Tyson each year. One expert said the practice of contracting out raising chickens allows companies like Tyson to shed any risk associated with growing live animals.

Tyson Foods shuttered processing plants and canceled contracts with growers in an effort to cut costs and “drove out waste” in the company. Tyson introduced a restructuring program in 2022 that included consolidating corporate headquarters, reducing expenses and increasing efficiency, according to its filings with the U.S. Securities and Exchange Commission. The company announced closures across the country last year in order to boost productivity and efficiency. Tyson closed eight meatpacking plants in 2023, six of them chicken processing and two beef processing. It laid off more than 4,200 workers across all of its plants last year.

The barns Tyson chicken growers have are built with the company in mind, making transitioning to other poultry growing complicated and expensive. A former Tyson grower in Missouri said he has a little under $1 million left in debt. He has considered raising egg-laying birds for a new company, which bought the former Tyson plant. But he told Investigate Midwest it would cost nearly $2 million to retrofit his Tyson chicken barns to meet the new company’s specifications. Research shows this is a common experience across the poultry industry. Growers will build or purchase barns with company-specific parameters. In instances where a contract is cut short or growers want to move to a different poultry company, they often are unable to use or sell the equipment and barns they already own.

In a statement provided to Investigate Midwest, Tyson Foods said it is “proud to partner with a network of independent growers across the country, and we value the contribution that these growers make to our business. Closing plants is always a difficult decision, and we understand the impact it has on the people and businesses in those communities. We work to help our team members and partners through that transition, and Tyson Foods has provided affected growers with several options to honor our contractual commitments and allow growers to receive fair value.”