12/14/2013 7:00 AM
By Andrew Jenner Virginia Correspondent
HARRISONBURG, Va. — An old turkey processing plant that has been idle for years will begin operation as Virginia’s first commercial-scale organic broiler processing plant early next year. The new Shenandoah Processing plant will process up to 20,000 birds per day in its first year and perhaps up to 50,000 per day by the end of its third year.
“You’d rather work for yourself than for another company,” said Corwin Heatwole, Shenandoah Processing owner and president. At 31, Heatwole owns seven poultry houses and has contracted for several poultry integrators.
Heatwole, the majority owner, and a business partner, Wayne Billheimer, will invest more than $2.2 million to open Shenandoah Processing in a building on North Liberty Street in Harrisonburg that used to be a Pilgrim’s Pride turkey processing plant. On Monday, Virginia Gov. Bob McDonnell appeared at the facility to announce the new venture, which received some financial support from state and local economic development funds. The company is expected to eventually employ about 100 people at the plant.
Heatwole spent two years planning to open his own processing plant. From the beginning, Heatwole knew he’d need to occupy a niche market in order to be competitive. His company — its meat-handling branch will go by the name Shenandoah Valley Organics — will sell organic- and humane-certified chicken directly to wholesalers for further processing, packaging and distribution to retail outlets.
The U.S. market for organic chicken has grown very rapidly over the past decade. In 2001, organic meat, poultry and fish sales totaled just $32 million. That number rose to $538 million in 2011, with poultry accounting for $331 million in sales, according to the Organic Trade Association.
Crews are now at work in the facility installing equipment that arrived in 20 semitrailer loads from Mississippi, where Heatwole purchased it from a high-speed poultry processing plant that went bankrupt.
Heatwole estimates in the first year, Shenandoah Valley Organics will need about 45 poultry houses under contract. He now has contracts signed on 12 houses through five different growers; these are in addition to his own seven houses, in which he’ll also grow birds for his new company. The growers will start chicks in early January, and Heatwole plans to begin processing by the end of that month.
Excluding Heatwole’s houses, where he’s already raising organic chickens for live sale, all Shenandoah Valley Organics growers will be placing chicks in houses that currently sit empty. Heatwole expects to eventually contract with growers in several Shenandoah Valley counties, and hopes that his company offers an opportunity for smaller or older growers who have houses that are no longer in production.
“Our goals are to put as many poultry houses back into production as possible,” Heatwole said, adding that he’ll take growers with almost any kind of housing. Due to outside access requirements for organic certification though, the company will only place birds on the bottom level of a double-decker house.
The company’s business model differs from the conventional vertically integrated poultry industry in that growers will invest in their flocks and later sell them to the company. According to Heatwole, it’s an arrangement that gives farmers greater ownership in their birds in exchange for an opportunity to earn bigger returns than in conventional poultry.
“It’s a dream for many growers to have an opportunity like this,” he said, adding that he’s been getting “bombarded by phone calls” from growers interested in contracting with the new company, and has 30 people on a waiting list.
Organic feed and chicks will come from mills and hatcheries in Pennsylvania, which has a far more developed organic poultry infrastructure than Virginia. For the time being, Heatwole has no plans to open his own feed mill or hatchery, and he believes the plant will create new business opportunities for those facilities somewhere nearby.
“The poultry industry has a ripple effect through the economy,” said Virginia Poultry Federation President Hobey Bauhan, adding that the benefits of a new processing plant opening include the creation of new opportunities for farmers and more choices for consumers.
Growers will receive their organic certification through Pennsylvania Certified Organic, a certifier accredited by the USDA, and humane certification from Humane Farm Animal Care, a nonprofit organization based in Herndon, Va.