In a report titled “Help Wanted”, CoBank — a cooperative bank serving rural America — explores some of the factors influencing today’s agricultural labor climate.
The report also takes a closer look at how poultry processor Case Farms, cattle feedyard operator Friona Industries and pork producer Schwartz Farms are addressing the issue.
The following excerpts from that report are republished here with CoBank’s permission.
See the full report here.
A processor’s problem
U.S. chicken consumption per capita has increased every year since the 1960s. This year, the industry is expecting to hit a new high, with the National Chicken Council estimating that Americans will consume nearly 110 pounds of chicken and turkey per person.
The news is bittersweet for poultry processing executive Mike Popowycz, vice chairman and chief financial officer for Troutman, North Carolina headquartered Case Farms.
He’s struggling to fill the orders he has now. A lack of dependable labor makes it difficult for Case to process 3.3 million birds weekly to supply its customers.
The company needs 3,200 employees to fully staff its four slaughter plants, a prepared foods plant, three feed mills and four hatcheries at locations in North Carolina and Ohio.
Though Case has a core group of employees that comprise about 65 percent of its workforce, 35 percent of its hourly workers are in constant flux, said Popowycz. Last year, Case experienced a 100 percent turnover in hourly employees. Industry wide, the rate hovers around 80 percent.
“We’re leaving profits on the table because we don’t have adequate labor,” said Popowycz. “And we can’t expand because we don’t have anyone willing to work.”
In North Carolina, where poultry is the leading agricultural industry and accounts for more than 100,000 jobs, poultry processors are competing with each other for workers. Other industries, such as construction, hospitality and food service, are also labor competitors in areas where Case operates.
Case highlights three hiring roadblocks that are common in the industry.
- Competing with assistance programs: Many Case employees receive federal need-based financial assistance. Fearing a healthier paycheck will jeopardize that income stream, they won’t report for work some days or refuse overtime hours.
- Immigration restrictions: The company previously had as many as 140 EB-3 visa employees on its payroll. EB-3 is one of the myriad U.S. visa programs that allow hiring immigrants when qualified U.S. workers are not available. Last year, only one of the 200 visa applicants Case agreed to sponsor was approved. Case has also previously employed political refugees from places like Burma and Nepal. That labor pool was severely limited after the number of refugees allowed in the U.S. dropped from 150,000 to 45,000 last year. Though admissions have restarted with most countries, the national cap is the lowest since Congress created the program in 1980.
- Drug testing failure: Some weeks, as many as 15-20 percent of applicants fail the mandatory drug test.
But Popowycz’s greatest hiring headache lies outside processing plants. He’s more concerned about securing qualified truck drivers to transport feed, move birds and deliver processed poultry.
“There’s already a driver shortage in the U.S., and it’s just going to get worse. Nationwide, we’re short about 60,000 drivers. That’s projected to go up to 175,000 in five years,” he said, quoting statistics released in April by the American Trucking Associations.
Bridging the Gap
In addition to offering competitive pay and attractive benefits packages, some protein producers are trying more creative approaches to recruit and retain employees. The results of these efforts range from poor to good, but no one approach has proven to move the employment needle significantly.
Some of the strategies and their outcomes include:
- Thinking younger: Both cattle feedyard operator Friona Industries and pork producer Schwartz Farms are visiting area high schools in search of future employees. Friona employees spend time in agricultural education classrooms to help familiarize students with career opportunities in the feedlot industry. The company is also helping students buy horses and tack, so they are ready to come to work after graduation.
- Seeking out pockets of high unemployment: After Hurricane Maria devastated Puerto Rico last year, many islanders were left jobless. Seeing opportunity, Case Farms opened a recruitment office there. The company recently helped 50 people relocate to North Carolina to work at one of its plants.
- More frequent pay raises: At Schwartz Farms, new employees are promised pay increases after three, six and 12 months on the job. After the first year, raises are given annually.
- Incentive pay: At one of its plants, Case Farms adds an additional $1 per hour to paychecks of employees who report for all of their scheduled shifts each week. The incentive has done little to improve attendance. Paying more competitive wages, rather than offering bonuses or incentives, is working better at Schwartz Farms.
- Encouraging employee feedback: “We’re doing a better job of listening to our people,” said Schwartz about the Schwartz Farms company culture that encourages employees to speak up when they see a problem or have an idea. There is a similar mindset at Case Farms where employee groups meet weekly to offer their ideas for workplace improvements and productivity enhancements.
- Improved training: Many are investing more in employee training. “We want to challenge, lead and coach our employees to be their best,” said Sheila Schmid, who oversees human resources at Schwartz Farms. Before they can care for pigs on their own, the company’s barn employees are required to spend several weeks job shadowing a veteran employee and must complete 20 hours of computer-based training in subjects such as animal care, animal behavior and biosecurity. The company has hired a bilingual trainer to ensure new employees fully understand what they are taught.
- Promoting rural lifestyle: “We’ve taught our kids to think that success means getting a college degree and moving to a large city. But quality of life counts for a lot, and we rural employers need to exploit that,” said Schwartz. He points out the lower cost of housing as one factor that makes rural areas preferable to urban locales.
Editor's Note: Watch for our upcoming series on the labor challenges and solutions for the poultry and meat industry starting in the October issue of Meatingplace magazine.