Minnesota moves to cull or process hundreds of thousands of chickens at struggling farms

State agriculture officials have stepped in to process or cull some 300,000 chickens on farms across five counties after a western Minnesota chicken company abruptly closed following failed bankruptcy proceedings.

Farmers say the company that owns the birds, Fairfax-based Pure Prairie Poultry, ran out of money to continue feeding the animals or accept them for slaughter at its facility in Charles City, Iowa.

“We and the farmers are still working to get chickens to processing,” said Allen Sommerfeld, spokesman for the Minnesota Department of Agriculture.

On Sept. 20, Pure Prairie Poultry filed for Chapter 11 bankruptcy protection with plans to continue operating. In late September, the company backed out of bankruptcy proceedings citing an inability to “secure anticipated funding necessary to its reorganization efforts,” according to a court filing.

As a result, 138 full-time employees and numerous contractors are out of work and nearly 2 million chickens in three states need to be accounted for. As is common in the poultry industry, Pure Prairie owned the chickens and contracted with farmers, or growers, to raise them for slaughter.

After company officials informed agriculture officials they’d run out of money to feed the birds, the Iowa Department of Agriculture & Land Stewardship used state law to take on ownership and care of about 1.3 million birds housed on 14 farms across the state stranded by the Pure Prairie closure.

In 2020, when hog processing facilities closed due to the COVID-19 pandemic, the state similarly stepped in to euthanize hogs in southern Minnesota.

It took years for Pure Prairie to purchase and upgrade the Charles City plant, a process that started in 2019, according to a court filing from George Peichel, chief financial officer for the company. Last year, the facility was operating at full strength and marketing air-chilled “premium” chicken cuts.

Pure Prairie received more than $45 million in funding from the U.S. Department of Agriculture, including a $7 million grant and a $38 million loan guarantee.

The company owes more than $100 million — and possibly as much as $500 million — to more than 200 creditors, according to bankruptcy filings.

Peichel blamed COVID-19 and “contemporaneous supply-chain issues” for bogging down the young company.

“Due in significant part to factors well beyond its control, [Pure Prairie] has faced an uphill battle from the outset,” he wrote in an affidavit filed in September.

An attorney for the company did not immediately respond to a request for comment Tuesday.

In April, Pure Prairie CEO Brian Roelofs told a local economic development board the plant was processing 300,000 birds a week, according to the Charles City Press, and a second shift was in the works.

“You’ve got to have that continuous improvement mindset and hopefully have a little bit of foresight and attack the things that are going to come up to bite you,” he said. “We’ve got a good team of folks that are very seasoned leaders in the industry, and they seem to be able to anticipate those kind of things and make us better.”