08/28/2012 01:04 pm ET Updated Oct 28, 2012

Hurricane Isaac: Poultry Companies Prepare For Approaching Storm

* Tyson Foods, Sanderson Farms plan for power outages

* Storm headed for heart of U.S. chicken industry

By P.J. Huffstutter

CHICAGO, Aug 28 (Reuters) - U.S. poultry producers across the South are stockpiling fuel, testing generators and making other preparations in a bid to make sure their chicken houses and poultry processing plants can continue operations in the wake of Hurricane Isaac.

Such precaution by chicken producers Sanderson Farms and Tyson Foods Inc come amid a growing sense of caution by the chicken industry, which was hard hit by Hurricane Katrina seven years ago.

Back then, storm-related damages to agricultural industries topped $2 billion. Farms were destroyed, processing plants were shut down and high winds crushed chicken houses and killed flocks.

Isaac's current path on the Gulf Coast will take it into the heart of U.S. chicken production. About one-third of U.S. chicken production is based in Arkansas, Louisiana and Mississippi, said Paul Aho, a poultry industry consultant.

Sanderson Farms has been working steadily since last week to prepare for Isaac, which was closing in on the U.S. Gulf Coast on Tuesday and was expected to make landfall early Wednesday in the New Orleans area.

The company does not expect the storm to impact chicken prices, Chief Executive Joe F. Sanderson Jr. told analysts on its fiscal third-quarter earnings call Tuesday morning.

But the storm is expected to cause Sanderson Farms' southern Mississippi and southern Louisiana operations to temporarily lose power, said Chief Financial Officer Mike Cockrell in an earlier email to Reuters.

"Our live chickens, and we have some 35 million live chickens on the ground in South Mississippi, are housed in chicken houses that, of course, require electricity and natural gas to power ventilation equipment," Cockrell said.

If those livestock houses lose power, Cockrell said, the chickens could die from heat. So the company requires all of its poultry producers to keep generators on site to power the equipment in the event of a power outage.

It was a lesson the company learned in the wake of Katrina in 2005, when most of Sanderson's farms lost power, Cockrell said. The sheer magnitude of the damage - from roadways to farms to utility infrastructure - made it difficult for the company to keep diesel fuel flowing to generators that ran for an extended period of time after that storm.

At Tyson Foods, which has chicken farms in northern Alabama and central Mississippi that are most likely to be affected, plant managers and farmers are topping off feed bins, draining down their wastewater levels, cleaning gutters on their buildings and making sure that their generators are in working order, said Tyson spokesman Worth Sparkman.

Though Isaac is a far smaller storm than Katrina, Sanderson decided it needed to be as prepared as possible: The company has topped off all of the company's the fuel tanks and set up easier-to-access stock piles of ice, water, fuel and spare generators around the region.

"Our plants are going to be down one shift today in Mississippi and Louisiana, and then tomorrow, and hopefully we'll be able to make it up Saturday," Sanderson said on the analyst call.



Hurricane Isaac