Pure Prairie Poultry Fallout Continues – What happens when USDA grants are not coupled with market access …
Pure Prairie Poultry Fallout Continues
Wisconsin Senator Urges Aid to Farmers After Poultry Processor’s Collapse
10/18/2024 | 6:06 AM CDT
By Chris Clayton , DTN Ag Policy Editor
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After Pure Prairie Poultry shutdown at the end of September, farmers in Wisconsin resorted to giving away tens of thousands of chickens by finding people on social media willing to take them. A U.S. senator wants more action from USDA on the situation. (DTN file photo by Jim Patrico)
OMAHA (DTN) — The poultry company that collapsed financially at the end of September is committed to selling the business, restarting the Iowa plant and recovering payments for producers, a spokesman for Pure Prairie Poultry told DTN on Wednesday.
Pure Prairie Poultry shutdown at the end of September when its federal bankruptcy case was dismissed by a federal judge. The Minnesota-based company had received a $38.7 million guaranteed loan from USDA and a $6.9 million grant to reopen a processing plant in Charles City, Iowa, in 2023.
In an email to DTN, a spokesman for Pure Prairie Poultry apologized for the damages caused. "We know that our difficulties are causing real hardship for our growers and for others, and for that we apologize without reservation," the company stated.
Bankruptcy filings stated as many as 50 farms in Iowa, Minnesota and Wisconsin were growing chickens for the company when it failed. Pure Prairie Poultry officials wrote letters to officials in each state warning them that the company could no longer afford feed for the broiler flocks.
Pure Prairie stated to DTN that the company was unable to secure financing in bankruptcy to keep operating. The company’s funds also have been frozen by a third-party lender. This has prevented the poultry processor from meeting its financial obligations.
"The company is working to recover payments for products shipped to customers," the spokesperson stated. "A trust fund has been established to pay all valid grower claims under the Packers and Stockyards Act. The company anticipates that such claims will eventually be satisfied."
The statement added, "We remain committed to a sale of the business that will hopefully result in a new owner reopening the plant, working with the growers and rehiring the employees."
As many as 130 employees were let go in Charles City when the plant was closed at the end of September.
USDA on Wednesday also said the department is in close contact with the state departments of agriculture on the situation. Farmers should contact the local Natural Resources Conservation Service (NRCS) office if they need support dealing with mortality assistance, USDA stated.
"We are also evaluating support that may be available to impacted poultry growers under USDA’s statutorily mandated poultry trust established by the Packers and Stockyards Act. We encourage impacted growers to file a written notice of a claim through USDA’s Agricultural Marketing Service."
USDA added, "At the same time, the number of producers who relied on this market underscores the need to explore how the facility might continue with a return to profitability, which USDA will continue to assist in."
Farmers in western Wisconsin have resorted to giving away tens of thousands of broiler chickens mainly by connecting with people on Facebook.
Greg Marten, a farmer from Mondovi, Wisconsin, told DTN the last of his 45,000 or so chickens were picked up by various small farmers and others on Tuesday afternoon. Marten said he is owed roughly $90,000 from the company. He had been feeding chickens with Pure Prairie Poultry for nearly a year and a half.
"This was the nicest-looking flock I had ever had with them," Marten said.
It got stressful quickly, though, when Marten and others realized they didn’t have a way to feed the birds.
A GoFundMe page was set up for another farm couple in Mondovi that were faced with 62,000 chickens that the couple were giving away. The farmers told a local radio station their chickens were starving and Pure Prairie Poultry owed them more than $100,000. Marten said most of that farmer’s chickens are gone as well.
The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) told farmers the state did not have statutory authority to assume control of the birds because the situation was not tied to an animal disease. The state also did not have funding to feed the flocks.
A spokeswoman for the Iowa Department of Agriculture and Land Stewardship (IDALS) responded Wednesday to DTN that the state is still providing feed to as many as 1.3 million chickens in northwest Iowa. "Birds are being fed and cared for while we continue to search for a market solution and processing. As this is a pending legal matter, we have no further comment at this point," an IDALS spokeswoman stated to DTN.
Thom Petersen, the Minnesota agriculture commissioner, said the Minnesota Department of Agriculture offered to assist farmers in that state who choose or opted to depopulate their flocks. Petersen estimated MDA assisted in depopulating about 150,000 birds but they do not have final numbers.
Sen. Tammy Baldwin, a Democrat and a member of the U.S. Senate Agriculture Committee, on Wednesday wrote Agriculture Secretary Tom Vilsack calling for assistance to help farmers hit by the closure.
Baldwin wants USDA to work with state officials to locate all the affected farmers in her state and provide feed and financial assistance "to make them whole again." She also wants recommendations for some type of bill or regulatory solution to prevent these kinds of events from occurring again.
"Hard-working Wisconsin farmers across our state have been left high and dry by the abrupt closure of Pure Prairie Poultry," said Sen. Baldwin. "Our agriculture industry is the beating heart of many of our communities and, in the face of this dire situation, I’m calling on USDA to do everything they can for these Wisconsin farmers who now stare down financial ruin through no fault of their own."
USDA stated last week that the department was collecting information to determine if there are valid dealer trust claims that could be pursued under the Packers & Stockyards Act. USDA also was working with the lender on the $38.7 million USDA-guaranteed loan that had been granted to Pure Prairie Poultry.
Marten, however, said he has had no contact from anyone at USDA.
Marten said he didn’t have much hope of seeing any money coming back from the company, but Marten said he expects someone else will come along and buy the processing plant.
"I’m sure they are going to need barns, but I’ll be awfully leery about it and want some guarantees about how stable they are," he said.
Pure Prairie Poultry was one of the first recipients of funds under the Biden administration initiative to help boost competition in the meatpacking and poultry industries. The funds were meant to help reopen the Charles City, Iowa, plant, which had employed as many as 130 workers before it was closed at the end of September.
The company had been processing chickens and sold products to grocery stores regionally in Minnesota, Iowa, Missouri, Nebraska, South Dakota and North Dakota.
When the company initially filed for bankruptcy, Pure Prairie reported more than 900 creditors and somewhere between $100 million and $500 million in liabilities. The company had warned in its bankruptcy filing that it was looking at $10.8 million in negative cash flow in the coming weeks and needed a line of credit of $15 million to continue operating.
USDA said producers should file a notice of claim and contact the Agricultural Marketing Service Midwest Regional Office. Email: PSDDesMoinesIA
Further information on how poultry growers can file a claim through AMS’ Statutory Trust can be found here: https://www.ams.usda.gov/….
Also see "USDA Looking into Claims Poultry Growers Weren’t Paid in Failed Broiler Plant" here: https://www.dtnpf.com/….
Chris Clayton can be reached at Chris.Clayton
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