Timothy Bundren must have heard wrong.
The sun wasn’t up yet. He was still groggy from starting his morning routine of walking through chicken barns.
His phone rang and his contact with the global meat company headquartered in Springdale, Arkansas, just two hours south of his farm, started telling him he would no longer be raising chickens.
Bundren, 52, didn’t believe him at first. Just hours later, he was supposed to meet with the bank about another loan to buy the farm down the road. Bundren waited an hour and then called the man back.
The news didn’t change, but the weight sunk in.
Tyson Foods closed four meatpacking plants that day in North Little Rock, Arkansas; Noel and Dexter, Missouri; and Corydon, Indiana. Bundren lives near the plants closed in Missouri and Arkansas. Because of this, the company canceled Bundren’s contract to raise broiler chickens.
But to his knowledge, the chickens Bundren raised weren’t processed at the plants shut down that day. His chickens were shipped to a Tyson plant in Green Forest, Arkansas, just half an hour away and still in operation.
When Tyson closed those regional plants, it had to reassess which growers would send chickens to which plants to meet demand, said Eddie Todd, president of the Missouri-Arkansas Poultry Growers Association and president of the Arkansas Farmers Union.
“The plant that (Bundren) sent his birds to might not have been directly the cause since it didn’t close, but it was because of the other closures and how Tyson looked at all the plants’ feasibility,” Todd said.
Bundren and other growers affected by the closures have been caught in the wake of a larger, company-wide initiative to cut costs. But that has left some growers with more than a million dollars in debt — debt they accumulated at Tyson’s urging — and few options to pay it back, according to growers Investigate Midwest interviewed.
They told me point blank that as long as I grow decent birds and do my job, they would keep me in birds long enough to pay my loan off.
Timothy bundren
Bundren is $1.4 million in debt. Nine months since that call, his barns are still empty.
While relieved he didn’t sign onto another loan, his world has been turned upside down.
“I’m thinking if I’m hearing this right, I’m out of business,” he said. “How am I going to pay a loan this big back?”
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.
“These assets that we’re shuttering would have required significant capital in order to make them competitive,” said Tyson President and Chief Executive Officer Donnie King in an August 2023 investor meeting, the same morning the company announced plant closures across four states. “If you look at the returns on those, it really didn’t make sense to do that.”
The company’s plans came at a human cost. 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 company has a lot to gain from its contract growers. In 2023, Tyson Foods had nearly $53 billion in sales — a third of which was from chicken. The company operates 183 chicken facilities across the country, which include processing plants, hatcheries, feed mills and grain elevators. The company’s website states it contracts with more than 3,600 poultry farmers nationwide.
It is unclear how many growers, who are not employees, had contracts with Tyson before the plants closed last year.
But in the counties where Tyson shut down chicken processing plants last year, and where contract growers who spoke to Investigate Midwest operate in, there were a total of 114 broiler chicken farms under production contracts in 2022, according to the USDA’s most recent agricultural census. Many farms raise more than a million birds each year.
Bundren has spent the past six years annually raising about 600,000 broiler chickens, or chickens bred for consumption.
Like almost all broiler chickens in the country, his were raised under contract for a major poultry company. Many chicken growers only grow for a single company as more than half of contract chicken growers live in a region with two or fewer companies, according to a 2012 Journal of Agricultural and Applied Economics study.
“I stand a chance of losing everything. Every (chicken) house I got, all my land, everything,” Bundren said. “It’s throwing me and my family in the street. Tyson ain’t thinking about that, and I guess they don’t care.”
From the pivotal early morning phone calls to the millions in 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. Their contracts canceled, they’re now saddled with massive debt. They said the company pushed them to go into more debt to upgrade their barns to meet company demands. Growers also said the company told them that they would be given chickens to raise for as long as they had loans on their barns.
Now that their contracts have abruptly ended, Tyson contract growers said they aren’t able to pay off the debt. Growers are staring down bankruptcy and foreclosures. Some have sold off land or other property to pay off debt while others have retired or looked for work off the farm.
Investigate Midwest spoke to five growers, located in Arkansas, Missouri, Indiana and Virginia, and pored through lawsuits filed by four other contract growers to find how Tyson’s closures have affected the farmers who raise the company’s chickens. A grower in Virginia asked for anonymity because of concerns over breach of contract. Another grower asked to speak on background only, but their situation mirrored that of the other growers.
Tyson did not answer specific questions about the closures, its relationship with contract growers, or how many growers lost contracts due to these closures. In a statement emailed to Investigate Midwest, it said closing plants was not an easy move:
“Tyson Foods 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.”
Almost a year after the first announcement of Tyson plant closures and canceled contracts, King, Tyson’s president and CEO, said in a February investors meeting that the company is already “seeing the benefits of these actions and we’ll continue to evaluate opportunities to drive efficiency, across our segments.
“The improvements are coming from operational improvements, operational excellence both in plants and in live production and really driving out waste from the business,” King said.
Tyson’s 2023 annual report states it lost $322 million in costs related to closing plants in 2023. One of those costs was contract terminations for chicken growers. The growers that Investigate Midwest interviewed were offered buyouts of their contracts but all stated it would not be enough to cover the entirety of their debt.
Source: Investigate Midwest
