State says cost to feed then dispose of Pure Prairie Poultry chickens was more than $2.3 million

By Bob Steenson, bsteenson@charlescitypress.com

The state says it incurred more than $2.3 million in costs after stepping in to care for about 1.3 million abandoned chickens owned by Pure Prairie Poultry in Charles City after the firm shut its doors on Oct. 2, 2024.

Iowa Department of Agriculture and Land Stewardship (IDALS) filed a final report in Iowa District Court for Sioux County late last week, detailing expenses for feed, care, “depopulation” and disposal of thousands of chickens left without adequate food when when the chicken processing plant ceased operations.

The chickens were located on grower farms, but Pure Prairie Poultry (PPP) owned the birds, paid for the birds’ feed and paid the growers to raise them to marketable size. The growers also have an ownership stake in PPP.

The largest share of the expenses, over $1.1 million, was for feed for the chickens. Additional costs included nearly $400,000 for disposal and more than $500,000 to euthanize the birds, which began in mid-October and concluded on Oct. 25.

Administrative expenses, including IDALS staff time and travel, brought the total to $2,310,444, the report says.

IDALS is seeking court approval to recover the costs from PPP stakeholders, prorated based on their ownership interests in the livestock.

Last Friday, Sioux County District Court Judge Jeffrey Neary set a date of Monday, Feb. 10, for anyone to file objections to IDALS’s claims of costs and assessment of costs.

“If no objections are filed by the deadline, the Court will issue an order approving IDALS’s costs and assessing said costs” according to Iowa Code, the court order says.

The state intervention began after IDALS filed an emergency petition in Sioux City District Court on Oct. 2, 2024, when it became clear the chickens at several contract grower sites across Iowa were in immediate need of care.

The court granted temporary relief that same day, allowing IDALS to provide food and assume supervision of the poultry. The state also attached an agricultural lien to the livestock to secure repayment of expenses.

Thousands of other chickens were also on grower farms in Minnesota and Wisconsin, although those states said they did not have the authority to take over management of those birds.

An attempt to reorganize PPP through Chapter 11 bankruptcy had quickly failed last September because creditors would not agree to allow additional emergency financing for the company to take a senior position to their own claims.

PPP announced to its production workers on Oct. 2, 2024, that the plant was closing and that production positions had been terminated. According to the Iowa Workforce Development’s Worker Adjustment and Retraining Notification Act (WARN) site, 132 employees were affected.

After the emergency order was issued allowing IDALS to take over management of the Iowa chickens, the department tried to find buyers for the marketable birds, but was unsuccessful.

An offer to buy the chickens for 50 cents each by Pitman Farms was unsuccessful because it included contingencies including PPP going through bankruptcy, the state report says.

“IDALS did not receive any additional verifiable, concrete offers for the entire flock,” the report to the District Court said. “While it received offers for smaller amounts of chickens, follow-up revealed they were not concrete offers with specific amounts or destinations, and the potential buyers could not provide the assurances IDALS would need to avoid further liability, including assuming risk of loss during transportation and responsibility for catching and loading the chickens.”

Even efforts to give away the chickens for processing proved “unworkable for similar reasons,” the report says.

By mid-October, IDALS determined the only viable option was to “depopulate” the chickens, prioritizing larger, nonmarketable birds first, and eventually euthanizing all the birds. Licensed veterinarians supervised the humane euthanasia process using a water-based foam method, the report said.

“Depopulation of all subject chickens concluded on October 25,” the report said, adding that each farm was disposing of the carcasses through composting.

In its final report, IDALS expressed frustration in the process, saying the situation should have been avoided and that the state taking over management of the chickens was a last resort.

“IDALS does not want what happened in this case to be repeated,” the report says. “Allowing a livestock-owning debtor to abandon the bankruptcy process after being unable to obtain additional financing or a satisfactory restructuring of debts could encourage other financially insolvent livestock owners to see state-rescue of neglected livestock as a more convenient, efficient, and less-costly resolution to a potential protracted and complicated legal battle in a bankruptcy proceeding.”

The report, which was issued by attorneys with the Iowa Office of the Attorney General, says that creditors who argued they still had claims to the chickens and the state couldn’t sell them with a clean title “are wrong.”

“This scuttled the only opportunity for a resolution resulting in both proceeds for the sale of the livestock and a definitive endmarket where the chickens would be harvested for protein,” the report said.

“For it to be otherwise would cripple the State’s ability to obtain proceeds from disposing of rescued livestock and thereby cripple the State’s ability to recover its costs. This would discourage the State from exercising its authority under chapter 717, an absurd result for a statute intended to prevent animal cruelty through abandonment,” the report said.

The report identifies 13 Iowa grower sites involved in the action – two sites each in Latimer, Boyden and Maurice, and one site each in Orange City, Ledyard, Rock Valley, Parkersburg, Aplington, Atkinson and Dows.