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Business and Economic News
Hannah Yang
Mankato, Minn.

Thousands of chickens to be culled after Minnesota poultry company faces financial problems

A chicken outside of a barn structure, looking in.
A chicken looks in the barn at Honey Brook Farm in Schuylkill Haven, Pa.
Lindsey Shuey | Republican-Herald via AP, File 2022

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Minnesota farmers under contract to a struggling local poultry company have been scrambling to care for thousands of chickens in recent days.

Pure Prairie Poultry ran out of money to care for more than a million chickens in Minnesota, Iowa and Wisconsin after the company filed for bankruptcy and closed its Charles City, Iowa chicken processing plant.

Thom Petersen, Minnesota ag commissioner, said the agency has been working with six chicken farms around the state affected by the closure of the Fairfax-based company by helping feed, sell or give the birds away. However, many of the birds are expected to be culled.   

“I want to be really clear that this is not a neglect case on the part of the farmers,” Petersen said Wednesday. “The farmers are trying to do what’s right for the birds before it becomes a neglect-type situation.”

Pure Prairie Poultry filed for Chapter 11 bankruptcy in September, according to court documents. However, after a judge dismissed the request, the company decided to stop paying for the feed for about 1.3 million chickens it owned that were being raised by growers across three states, including Minnesota. 

Investigation to come

This comes less than two years after Pure Prairie started operating in Charles City on the site of four past chicken processing companies that didn’t stay in business, according to local news outlets. The USDA had given the company an estimated $39 million loan guarantee and an estimated $7 billion grant for the Iowa plant. 

Petersen said he met with the USDA earlier this week and that the agency will be launching an investigation into the bankruptcy. 

“USDA put a large grant to them and so you assume that things are looking good,” he said. “Margins are tight sometimes, and a lot of different things, but I would say unfortunately, yes it came out of the blue … it was a surprise that it was in this bad of condition.”

Since the closing of the processing facility in Charles City, Iowa, there was nowhere for the mature birds to go. The Minnesota Department of Agriculture stepped in to feed and handle around 300,000 of the chickens, Petersen said. He added the state was able to sell and give away some before learning of the plant closing. 

“We did see this in 2020 when we had processing plants close and we did have to euthanize millions of chickens at that time and hundreds of thousands of turkeys and hogs … so we have gone through this before,” he said. “Minnesota is prepared for this type of emergency, unfortunately.”

Petersen said the actual numbers may change as the situation is fluid. The department is also exploring options to recuperate some of the accrued costs.