We are pretty sure that you have heard the term “contract grower” before, but do you know what it signifies? Have you ever thought about where the broiler chickens for sale come from? If not, it is surely the right time to ponder.
You may not know, but a contract grower is basically an independent farmer who tends to work and invest under a contract with a particular chicken production. They also process institutions to raise the chicken.
So, next time when you see your local poultry shop unpacking the freshest chicken, rest assured that it came from an authentic family.
Because of the growing need for chicken meat, chicken farming has become one of the utmost significant businesses. A study has found that almost 90% of the chicken supplied in the market in the US is raised by contract farmers.
What Do We Understand About The Partnership Between Chicken Contract Farmers And The Company?
The company with which the chicken farmer wants to be bonded using the contracts provides every necessary aspect for the chicken’s well-being. Starting from the chickens to the feed, even the veterinarian care, and needed technical advice will be given by the company.
However, the poultry farmer will provide day-to-day care to the bards, lands, and housing to be raised and maintained accordingly.
This partnership is the significant key to vertical integration as it will support the economic viability and support the independence of the family farm. Moreover, this pact will help in increasing the efficiency and consistency in the production of poultry.
How Does The Performance Structure Work?
The performance structure works in the following way.
● Farmers first deliver the chickens on the day on which they will be hatched. These hatched birds will be raised in the houses provided by the contract farmer. Normally, The industry will provide the feed, water, animal welfare experts, and the veterinarian. The farmer will provide their day-to-day care and maintenance as well as housing facilities to the flocks.
● Farmers and companies will agree on the predetermined pound of weight gain price built on an average. It will guarantee a certain amount of rate for the chicken that will meet the requirement. That money will go to the farmer.
● The farmers will be paid based on the weight gained by the flock. In other words, the farmers having greater skills and better management capabilities, combined with how advanced the farm is, will earn comparatively more.
● However, all the farmers will be paid a base. Along with that, they will be given pre-arranged compensation charges. Moreover, these farmers will be held to the standards of animal welfare to produce sound animal husbandry. So, the abuse of any kind to the animals will not be tolerated. Hence, if one is found guilty, the contract will be terminated.
So What Are The Benefits Of This Contract?
Currently, the system is beneficial to both parties. The company and the farmer create a space where the partnership can absorb most of the risk.
Normally the chicken farmer will get a ‘guaranteed market’; hence, they can avoid the risk of selling their chicken without facing a loss.
Moreover, contract farming is an extraordinary method of garnering supplemental income for farmers. It also helps them to diversify their business while coming around with a modest income.
On average, almost 95% of the contract farmers read year over year by the same company. Most of the companies have waiting lists for contract farmers.
Conclusion:
Hence, it shows how the concept of contract farmers is extending. This increases the capacity to deliver poultry meat and increases the number of poultry farm in the United States.
