King meets with local farmers affected by move

State Sen. Bryan King met Friday, Aug. 11, with local poultry farmers affected by Tyson Foods’ recent move to buy out their contracts.

The local farmers, whose names are not being disclosed in the newspaper because their buyout contracts with Tyson include nondisclosure agreements, say they began being notified by telephone of Tyson’s plans on the morning of Monday, Aug. 7. One farmer said he received a telephone call from a Tyson field agent before 7 a.m.

Affected farmers say they have been given the option of accepting a single lump-sum payment or receiving installment payments. They expressed concerns over the potential tax liability in accepting a lump-sum payment.

Farmers also were concerned about how the end of their relationships with Tyson could affect long-term loans they’ve taken in order to pay for infrastructure and equipment.

Tyson, the largest employer in Carroll County with processing plants in Berryville and Green Forest, held its third-quarter 2023 earnings call on Monday, Aug. 7 – the same day local farmers were notified of the company’s plans to buy out their agreements. Tyson announced a $417 million net loss for the three-month period ending July 1 and said it will close poultry processing plants in North Little Rock; Corydon, Ind.; Dexter, Mo.; and Noel, Mo.; in the first two quarters of fiscal 2024.

King, a poultry farmer himself, said he believes approximately 30 farmers were affected in Carroll County. Farmers in Madison County also reported that Tyson is buying out contracts there.

King, whose district includes Carroll and Madison counties as well as portions of Boone, Franklin, Johnson and Newton counties, said he plans to meet with affected farmers in Madison County and hopes to schedule a meeting with Tyson officials in the near future. He said it’s difficult to gauge the long-term impact of Tyson’s decision.

“Is this a deep valley or is off a cliff?” he said. “We just don’t know. … The real ripple effect of this is, not only have they devalued every chicken farm out there, they’ve also made it where: What bank’s going to risk loaning the money?”

King said he hopes to discuss with Tyson officials the possibility of deferring lump sum payments until after Jan. 1 to minimize the tax impact on farmers.

“Can we at least look at that option?” he said. “That’s one thing I learned today.”

King described the meeting as “the start of a process.”

“This has been something that’s kind of broken the glass on something we never really thought would impact … we’ve had small impacts, negative impacts for whatever reason or another. But this is the worst blow I can ever remember in agriculture in our area, probably since the Great Depression.”

The effects will be felt in every aspect of the local economy, King said.

“It’s going to affect the economy for everybody,” he said. “You’re going to see the banking part. You’re going to see the businesses that we interact with every day. You’re seeing a huge chunk of income and the devaluation of every poultry farm.”

King said one local poultry farmer told him about receiving a $1 million offer on his farm a couple of years ago.

“And now it’s worth nothing,” King said.

In response to an Aug. 7 inquiry, a Tyson spokesman said by email: “We will honor our obligations to our contract broiler growers in these areas.”

Some farmers reported having discussions with other poultry processing companies. Among those is Butterball, which operates a plant at Huntsville.

“Butterball has been contacted by several farm owners impacted by the recently announced Tyson plant closures,” Butterball spokesperson Christa Leupen said by email. “At present, Butterball is evaluating both short-term and long-term production needs to determine if any of these farms may align with our business objectives.”

George’s Inc. did not respond to an email message requesting comment.