Inside Wayne Farms new feed mill

by Arvin Donley
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Surviving the commodities bubble

Wayne Farms, like other U.S. poultry producers, endured a difficult business climate beginning with the global economic downturn in the late 2000s that saw commodity prices soar and remain volatile for a four- to five-year period. During that time, Wayne Farms closed its poultry processing plants in College Park, Douglas and Oakwood, Georgia, U.S.

“We went through a situation several years ago where the price of corn really skyrocketed,” Williams said. “It impacted our industry pretty significantly with losses across pretty much all companies. There were companies that went out of business, there were several bankruptcies and most had to streamline things to some degree.

“But since then things have leveled out a bit. The price of corn being stable the last couple of years has been a part of that leveling out. The price of chicken has been up and down, but the price of corn has been stable and that certainly has helped our profitability.”

Williams said the weakening demand for ethanol made from corn in recent years has helped stop the bleeding.

“The diversion of corn to ethanol wasn’t anticipated to boom like it did,” he said. “But eventually they found the return on investment just wasn’t there. The global climate impact aside, from an economic standpoint ethanol just doesn’t make sense. It doesn’t work at all without subsidies.”

Continental Grain’s impact

Although a formidable force in the U.S. poultry industry today, Wayne Farms’ historical roots are in feed milling. It all began in 1895, when Marsden Company of Philadelphia, Pennsylvania, U.S., organized Allied Mills Inc. Several years later, Marsden consolidated its manufacturing of commercial feeds and changed its name to American Milling Company.

The eventual company name, Wayne Farms, stems from D.W. McMillen’s 1916 purchase of a small elevator in Fort Wayne, Indiana, U.S., which began manufacturing a feed called Wayne. In 1929, Allied Mills acquired the business, which had been operated by D.W. McMillen and the American Milling Company.

Nearly 30 years later, in 1957, Allied Mills entered the poultry business with the construction of a plant in Laurel, Mississippi, U.S. The company purchased another poultry plant in 1961 in Union Springs, Alabama, U.S., and named it Wayne Farms.

That led to a game-changing moment for the company in 1965, when New York-based Continental Grain Co. acquired 51% of the common capital stock of Allied Mills through a tender offer made to the shareholders of Allied. At that point, the decision was made to spin off the poultry division and focus on the manufacturing and sale of fresh poultry under the Wayne Farms name.

“That’s what transformed the company,” Singleton said. “At that point vertical integration from a feed business and poultry production standpoint made a lot of sense, and so those synergies were brought together. With the resources and assets of Continental, the company now had access to markets that it wouldn’t otherwise have access to, and also access to capital and investment that it didn’t have before.

“The company was able to do some things during that period of time that really got us to the position we are now, ranking in the top 10 poultry producers in the U.S. for a number of years.”