House of Raeford Farms' plan to phase out of the commodity turkey business to focus on its broiler sector and ready-to-cook chicken and turkey products is going smoothly, according to the company's managment.
On March 14 the company announced it would phase out House of Raeford Farms' commodity turkey growing and slaughter operations in eastern North Carolina, which includes closing its Rose Hill hatchery and Raeford slaughter plant. It also means farmers raising turkeys for the operation would no longer have a secure place to sell their birds.
Turkey products will remain part of business
While House of Raeford will no longer be in the turkey growing business, it will continue to process turkey products. Ready-to-cook poultry products are growing in popularity with consumers, whether they are chicken or turkey meat.
"The recent changes we made were not only based on an increased emphasis on chicken production, but also on the expansion of our fully-cooked turkey and chicken product lines," said Robert C. Johnson, House of Raeford's chief executive officer.
Products that House of Raeford plans to expand processing of include ready-to-cook chicken, tray pack ground turkey and chicken, battered and breaded nuggets and patties, and fully-cooked turkey and chicken products.
The company envisions maintaining a successful and fully-operational turkey cook plant to process turkeys, but the birds will be grown and provided outside of the company. At the present time, House of Raeford does not have any plans to re-enter the turkey growing and slaughtering business, even if it becomes more financially viable.
Growth of chicken sector
The move to place more emphasis on chicken products was a direct reflection on the promising financial state of the broiler industry, versus the economic struggles of the turkey industry, according to Johnson.
"We have seen steady growth in our chicken operations over the past decade, and we have confidence that the broiler markets will continue to be profitable," he said.
At the time the changes were announced, the chicken business represented more than 90 percent of the company's sales. Within the past 10 years, growth in chicken operations helped House of Raeford transform into one of the nation's top-10 chicken producers and processors.
Meanwhile, the effect of high corn prices has had a harsh effect on the turkey industry. With multiple years of flat-to-declining per-capita turkey consumption, and falling turkey commodity prices, the company opted to no longer grow its own turkeys.
"The increased emphasis on fully cooked, ready-to-eat turkey and chicken products as well as expanded broiler production will certainly affect our future marketing plans and the positioning of the company going forward," said Robert C. Johnson, House of Raeford's chief executive officer. "However, we will continue to preserve the benefits of a family-owned and operated company with a focus on producing safe, wholesome and great-tasting products. These are the qualities that have allowed us to be successful for more than 50 years."
Facilities undergoing changes
Johnson said the company is still in the early stages of the transition, but "everything seems to be on the original 4 to 6 month phase-out timing."
The Rose Hill hatchery will be closing in early May, while the processing plant in Raeford continues to work in all departments until the slaughtering process ends. That is projected to be sometime in May.
There are no current plans for establishing a new facility for the expanded processing of ready-to-cook chicken products, said Johnson. Nor will the company need to repurpose the closing turkey slaughter plant. The capacity in the existing plants over the next two to three years, Johnson said, will be sufficient.
The company will, however, continue to operate its Raeford cook plant, and will expand its production on value-added chicken and turkey products.
Working with growers, employees
House of Raeford's management would like to continue to work with many of the growers it has been associated with while in the commodity turkey business, if they are willing to transition their turkey operations into broiler operations.
"These discussions are in the early stages with each of our turkey growers, so only a few firm decisions have been made at this point. However, we expect many growers will make the decision to convert to broiler production as we expand our chicken production operations," Johnson said.
As for employees at the affected House of Raeford facilities, the company is doing what it can to see that as many as possible can maintain employment.
"We expect many employees from the hatchery operation in Rose Hill will transfer to one of our two chicken processing plants in the same county. Since the Raeford, turkey processing plant will not close for three or four months, we have not actually begun these specific discussions with our employees at that location," Johnson said.
The company has also contacted other meat processors in the area who are willing to employ Raeford processing plant employees for positions in their companies.
On March 14 the company announced it would phase out House of Raeford Farms' commodity turkey growing and slaughter operations in eastern North Carolina, which includes closing its Rose Hill hatchery and Raeford slaughter plant. It also means farmers raising turkeys for the operation would no longer have a secure place to sell their birds.
Turkey products will remain part of business
While House of Raeford will no longer be in the turkey growing business, it will continue to process turkey products. Ready-to-cook poultry products are growing in popularity with consumers, whether they are chicken or turkey meat.
"The recent changes we made were not only based on an increased emphasis on chicken production, but also on the expansion of our fully-cooked turkey and chicken product lines," said Robert C. Johnson, House of Raeford's chief executive officer.
Products that House of Raeford plans to expand processing of include ready-to-cook chicken, tray pack ground turkey and chicken, battered and breaded nuggets and patties, and fully-cooked turkey and chicken products.
The company envisions maintaining a successful and fully-operational turkey cook plant to process turkeys, but the birds will be grown and provided outside of the company. At the present time, House of Raeford does not have any plans to re-enter the turkey growing and slaughtering business, even if it becomes more financially viable.
Growth of chicken sector
The move to place more emphasis on chicken products was a direct reflection on the promising financial state of the broiler industry, versus the economic struggles of the turkey industry, according to Johnson.
"We have seen steady growth in our chicken operations over the past decade, and we have confidence that the broiler markets will continue to be profitable," he said.
At the time the changes were announced, the chicken business represented more than 90 percent of the company's sales. Within the past 10 years, growth in chicken operations helped House of Raeford transform into one of the nation's top-10 chicken producers and processors.
Meanwhile, the effect of high corn prices has had a harsh effect on the turkey industry. With multiple years of flat-to-declining per-capita turkey consumption, and falling turkey commodity prices, the company opted to no longer grow its own turkeys.
"The increased emphasis on fully cooked, ready-to-eat turkey and chicken products as well as expanded broiler production will certainly affect our future marketing plans and the positioning of the company going forward," said Robert C. Johnson, House of Raeford's chief executive officer. "However, we will continue to preserve the benefits of a family-owned and operated company with a focus on producing safe, wholesome and great-tasting products. These are the qualities that have allowed us to be successful for more than 50 years."
Facilities undergoing changes
Johnson said the company is still in the early stages of the transition, but "everything seems to be on the original 4 to 6 month phase-out timing."
The Rose Hill hatchery will be closing in early May, while the processing plant in Raeford continues to work in all departments until the slaughtering process ends. That is projected to be sometime in May.
There are no current plans for establishing a new facility for the expanded processing of ready-to-cook chicken products, said Johnson. Nor will the company need to repurpose the closing turkey slaughter plant. The capacity in the existing plants over the next two to three years, Johnson said, will be sufficient.
The company will, however, continue to operate its Raeford cook plant, and will expand its production on value-added chicken and turkey products.
Working with growers, employees
House of Raeford's management would like to continue to work with many of the growers it has been associated with while in the commodity turkey business, if they are willing to transition their turkey operations into broiler operations.
"These discussions are in the early stages with each of our turkey growers, so only a few firm decisions have been made at this point. However, we expect many growers will make the decision to convert to broiler production as we expand our chicken production operations," Johnson said.
As for employees at the affected House of Raeford facilities, the company is doing what it can to see that as many as possible can maintain employment.
"We expect many employees from the hatchery operation in Rose Hill will transfer to one of our two chicken processing plants in the same county. Since the Raeford, turkey processing plant will not close for three or four months, we have not actually begun these specific discussions with our employees at that location," Johnson said.
The company has also contacted other meat processors in the area who are willing to employ Raeford processing plant employees for positions in their companies.
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