In the U.S., Tyson contracts with 4,000 farmers to raise the chickens that Tyson processes leaving the individual farmers to should the risk, transportation and logistical issues. In China, this model will not work as the country faces a growing demand for meat but reticence about food safety. After a decade of buying birds from independent farmers Tyson has decided to raise its own. To gain consumer confidence and market share, Tyson is spending hundreds of millions of dollars to build its own farms in China. Three years ago Tyson did not own any farms in the country. Today the company has 20. The goal is to double production in China to 3 million birds per week for distribution to help offset the company’s sluggish growth in the U.S. By 2015 the company plans to own 90 farms where employees wear sterilized uniforms and every truck that enters the grounds is sprayed three times with disinfectant. Estimates are that Tyson’s revenues in China were approximately $715 million for the fiscal year ending in September and that revenues will increase to $1.1 billion by fiscal year 2015. Other poultry companies in China are expanding as well, such as Fujian Sunner Development Co. which supplies KFC and Yum Brands Inc. which cut ties with small poultry suppliers that are being investigated for excessive use of antibiotics. Cargill Inc. has begun processing chickens in China in the spring of 2013 on its own farms, and Illinois-based OSI Group Inc. announced it will be expanding its poultry operations in China through a joint venture.
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