|Vol. VI, No. 4, Spring 1993|
A MEDLEY OF CHANGE IN OZARKS FARMING
Marketing the Ozarks Farm
by Minrose Quinn
Once, in southwest Missouri and northwest Arkansas, almost every village and town had a tomato cannery. The cannery itself provided not only seasonal jobs, but a market for the tomatoes produced on almost every farm in the region. But in the late 1940s and early 1950s, the tomato canning business died. This meant the Ozarks needed a new industry. Strawberry patches, sawmills and remaining canneries were too few and far between to supplement the dwindling income from the family farm.
Ozarkers needed something that could be done on the farm and on thin and rocky soil. The broiler business fit the need, and broiler houses began to spring up everywhere. Feed stores doubled their capacity; builders, bulldozers, and hatcheries worked to capacity, then expanded. But in the early 1930s, before all of this began in southern Missouri, a man in Springdale, Arkansas had parlayed five cents and a truck with halfa load of hay into 500 North Arkansas Springer chickens, which was the beginning of Tyson Foods.
John Tyson, like many other Ozarkers, was trying to survive the Great Depression and the great drought that was consuming the 1930's. Most people now associate the name Tyson with retail chicken products. Considering Tyson supplies 25% of all chicken consumed in the U.S., and is the largest chicken producer in the world, that's a reasonable assumption. However, John Tyson's first contribution to building the poultry industry in the Ozarks was to the progress and development of getting the growers' birds to markets beyond Kansas City and St. Louis. As a hauler, he developed safer ways to transport the birds and a method of feeding and watering chickens in transit. This put the Chicago market within reach of Ozarks poultry growers.
On John Tyson's first trip to Chicago he made $235.00 profit, not counting the $15.00 he held out for the 700 mile drive home. Due to the success of the Chicago trip, within a year Tyson was hauling chickens to new markets in Cincinnati, Detroit, Cleveland, Memphis, and Houston. Without the development of distant markets, the broiler business would never have been a viable option for Ozarkers.
Although reaching distant markets was a distinct breakthrough for this budding industry, chicken was still considered "poor man's meat" according to John Tyson. It was not until World War II, when chicken was exempt from rationing, that a consumption base developed to support the boom of the late 1940s and 1950s. When others in related industries realized distant markets were an option, several things came together. Hatcheries ran short on inventory, feed companies recognized a promising market, haulers eyed options as did egg producers, and Missouri was developing new and improved chick breeds.
These circumstances prompted John Tyson to buy a small hatchery to secure a supply of chicks for growers whose broilers Tyson trucked to market. It was shortly after his venture into supplying chicks that John Tyson, realizing this was a burgeoning market, branched into chick feed and became a commercial feed dealer for Ralston Purina. Tyson Feed & Hatchery was born.
The demand for chickens and the national involvement in WW II made grain for chickens hard to secure. Again, John Tyson moved to solve his own problems. He built his own commercial feed mill.
Porter Lucas, one of the first broiler growers in the Stone and Barry county region of Missouri, recalls when he started in the broiler business in the late 1940s. The big feed companies were not yet in the business. "When the chickens were grown you had to find a market. We were all independent growers in the beginning. Gradually the big feed companies took them all over. All the independent growers now are independent only in that they own their own operation. Everything is on contract. In the beginning the grower took all the risks. My operation got up to about 175,000 birds a year. Each grow-out I had over forty thousand chicks. That's a sizable risk."
The growers in the area formed the Ozark Broiler Association. They were feeding their birds on credit and needed someone to finance the grow-out period. This was too high a risk for local banks. The local feed suppliers began to extend credit, and the industry experienced pretty steady growth. This attracted the large feed companies. The big feed companies grew as the industry grew."
During the late 1940s,-large meat packing companies were attracted to the broiler business. Killing plants began to spring up in small Ozarks towns near grow-out farms. In Crane, Missouri, a tomato cannery was converted to a kill plant. This was fairly typical.
Small kill plant operations were made possible by the availability of refrigerated trucks that could carry ice packed chickens anywhere in the U.S. Ozarks labor was cheap and plentiful for killing plants. Independent growers found a "crop" for their worn out soil that required less labor than field crops. And, perhaps most important, the growers could get the big feed companies to share the risk in the grow-out.
Large feed companies saw this as an opportunity to integrate the industry. They represented a hatchery, supplied the feed, assumed the financing, and in some cases, trucked the chickens to market. The problem was the growers became dependent on the feed company. The small, independent feed companies had found other markets, and when the major supplier decided to concentrate its investments elsewhere and to pull out of the area, there was no one to fill the void. This was the end of the broiler industry in many sections of the Ozarks.
John Tyson was an exception. For farmers who bought Tyson chicks and feed at a set price, John Tyson assumed financial responsibility for marketing grown birds. This was the beginning of vertical integration, which Don Tyson, John Tyson's oldest son, continues today.
By 1952, Tyson Feed and Hatchery was producing twelve thousand chickens a week, and John Tyson was delivering them in the back seat of his car to the grow-out houses. That was the company's first year to have a million dollars in sales.
The 1950s were hard times for the broiler industry. Competition was fierce, national feed companies were pursuing control of the grow-out end of the business, and large meat packers were seeking control of the processing end of the business.
Don Tyson, today's Chairman of the Board of Tyson Foods, convinced his father John to build a processing plant. With this, Tyson became the first fully integrated broiler firm in the Ozarks. Tyson now serviced the industry from breeder stock and hatching eggs to broiler, providing the feed, processing the birds, and delivering them to market.
Don Tyson realized at this juncture it was either grow or give up to the conglomerates. It was "grow or die." This began an acquisition strategy that is still in place today.
Before Tyson began building its branded products they were a large commodity supplier. The story told around cracker barrels and pot-bellied stoves of the Ozarks is that Tyson would load the refrigerated trucks and head them west. Tyson sales representatives brokered the chickens by phone to the haulers in route. The battle cry was "Sell 'em or Smell 'em."
Don Tyson substantially changed the marketing philosophy of the company. His father John had a production-oriented strategy. Don Tyson's strategy was "Forward sales govern production." The company went from a commodity chicken producer to value added, deboned products for the food service industry, then to further processed, value added, packaged and branded products for the retail consumer.
Don Tyson has kept an agility in the company that has separated it from contenders. The company has over four billion in sales and an employee base of almost fifty thousand. Don Tyson attributes a great deal of Tyson's survival and success in an enormously competitive field to a marriage of efficient organization and independence: "I let my people skin the cat their own way. I don't care how it is done as long as it is accomplished." This philosophy sets well with the independent traditions of Ozarks farmers, and Tyson seems equally successful with that kind of worker empowerment in 16 other states and several foreign countries. Perhaps if the large conglomerates who took over other broiler operations had known a little more about the nature of Ozarkers they would have been tougher competition for Tyson. Or, maybe it takes an Ozarker to know one.
For more information, see Tyson: From Farm to Market, by Marvin Schwartz. University of Arkansas Press, 1991.
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