Tyson to Build Kansas Poultry Plant

OMAHA (DTN) -- Poultry farmers in the Midwest scored another victory on Tuesday with Tyson Foods' announcement it plans to build a $320 million poultry complex in Tonganoxie, Kansas, in the northeast part of the state.

In addition to creating 1,600 jobs, Tyson will be contracting with farmers to provide the needed poultry supplies to the operation.

According to a news release from the company, the operation would begin production in mid-2019. Tyson is expected to produce pre-packaged trays of fresh chicken for retail grocery stores across the country.

The plant will have the capacity to process about 1.25 million birds per week, according to a Tyson news release.

"The payroll and payments to farmers from the new operation, along with its purchase of grain and utilities, is expected to generate an annual economic benefit to the state of Kansas of $150 million," the company said. Tyson's Kansas plant will include a hatchery and feed mill.

Midwest poultry farming appears to be gaining market momentum. Costco broke ground in June on a poultry processing plant in Fremont, Nebraska, expected to launch production in April 2019.

In August, Tyson announced the U.S. Securities Exchange Commission was not pursuing an enforcement action related to allegations of poultry price fixing in 2008, http://bit.ly/….

Tyson said in the news release it intends to buy about 300 acres of land south of Tonganoxie, a town of 5,300 residents, and currently plans to break ground sometime this fall.

Farmers and ranchers who have interest in raising chickens for the new plant can find information at www.growwithtyson.com.

Tyson Foods announced earlier this year it was moving to a no-antibiotics policy with its branded retail chicken products, and said on Tuesday the Kansas plant will be part of that effort.

Tyson operates facilities in six Kansas communities and employs about 5,700 workers with an annual payroll of more than $210 million. According to the company's news release, in 2016, Tyson paid Kansas cattle suppliers more than $2 billion and hog suppliers more than $1.3 million.

"More people want fresh food, and as one of the world's leading protein companies, we're well-positioned to provide it," Tyson President and CEO Tom Hayes said in a statement.

"We believe this new operation, which will incorporate the latest production technology, will enable us to meet the sustained growth in consumer demand for fresh chicken."

Kansas Republican Gov. Sam Brownback said, "The far-reaching impact of this development will be felt by farmers, ranchers, agribusinesses and communities throughout eastern Kansas."

Doug Ramsey, group president of poultry for Tyson, said in a statement the region has what the company needs to make the facility work.

"We believe eastern Kansas is the right location because of the availability of grain and labor, as well as access to our nationwide customer base that is accessible through the state's top-notch transportation network," he said.

Kansas Secretary of Agriculture Jackie McClaskey said in a news release the state has identified poultry as an area for possible economic growth.

"The Kansas agriculture industry has been focused for several years on developing a strategic growth plan, and that process has identified strong growth potential in the poultry sector with available land resources, nearby feed supplies, and more," she said.

"This project converts that growth potential into real economic growth in our state." Agriculture is the largest industry in Kansas, providing nearly $68 billion annually, or about 45% of the state's economy.

"Tyson Foods is one of the largest food companies in the world, and we welcome the poultry business unit to Kansas," McClaskey said. "Their investment in our state is an indicator of the support and enthusiasm shown by local leaders who saw this opportunity for economic growth in their community."

The announcement, however, did not come without backlash from at least some Tonganoxie residents on Tuesday, as a local Fox TV affiliate reported. (http://dld.bz/…)

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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