Outside the Carton

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Visitors entering the fully automated Hickman's Family Farms egg production facility in Arlington, Ariz., pass through a security fence, are screened and step through a tray of disinfectant pellets before donning lab jackets, sanitary boots and hats. The entire facility is surrounded by a razor wire chain-link fence to keep out intruders and disease.

A computerized bank monitors all of the operations in the laying house, such as the number of eggs rolling out of cages, feed consumption and all of the vitals for the massive building, including temperature and ventilation.

This is as industrialized and modern as farming gets. The entire facility is spotless and smells fresh. It has to be this way—with growing environmental and food safety issues, staying in business means taking egg production to the next level of compliance.

"People have to understand that we can't farm the way we did a hundred years ago,” says Bill Hickman, founder of Hickman's Family Farms. Bill and his wife, Gertie, started raising chickens in 1944, long before the area became a suburb of Phoenix. The family farm in Glendale, Ariz., where they started with 500 layer hens and sold eggs to restaurants across the Valley of the Sun, is now a parking lot for a sports stadium.

Today the family business has 4 million laying hens at three farms in Arizona, one facility in Grand Junction, Colo., and a cage-free farm in Valley Center, Calif. Four of the Hickman children have taken positions in the company: Glenn is president; Billy is executive vice president of operations; Clint is vice president of sales and marketing; and daughter Sharman is vice president of public relations.

"One of our responsibilities is to help inform people—who don't understand that farming can't be like it was—that our chickens are treated humanely, they are healthier than ever and the eggs are safer than ever,” says Clint, gesturing toward pictures of the state-of-the-art, bio-secured barns that each can house about 189,000 chickens.

New World Production. Ten years ago, the Hickman family sat down at the breakfast table to chart the course for their egg processing operation, which was growing at a fast clip. Unfortunately, so was the waste that comes from large-scale livestock production. Finding a place for chicken manure was becoming difficult with all of the urban sprawl from Phoenix.

"Instead of our byproducts costing us, we had to develop ways to turn byproducts into moneymakers,” Glenn explains. In keeping with their growth plan, they expanded into nontraditional areas beyond just processing and cartoning eggs for supermarkets.   
For example, they built a fertilizer production plant to transform chicken manure into marketable pelletized fertilizer and compost, which they sell to other farmers, landscapers and golf courses. The operation's wastewater, heated to 140° to kill pathogens, is used to process the compost.

The farm now markets liquid eggs—small eggs that can't make the grade into cartons and that previously would have been tossed. The eggs are cracked open, pasteurized and sent in vats to restaurant chains. The Cheesecake Factory, for example, uses liquid eggs in its recipes.

Four years ago, the Hickmans invested in multimillion-dollar automation to build a hard-cooked egg business, with the capacity to cook, cool and shell 8,000 eggs per hour. Restaurants and institutions around the country contract the service, which saves these businesses hundreds of man-hours in cooking and shelling.

"To keep up with the industry, in the past few years we've really developed this farm operation into a food company,” Glenn says.

Tight Feed Margins. Meanwhile, the egg business has dealt with the increase in feed prices. The chickens on all five Hickman farms consume a total of 3.2 million bushels of corn and 29,000 tons of soy meal per year. The vast majority of the grain is purchased and shipped out of the Midwest and delivered to Hickman's own Arizona feed mill, where the basis is usually about $1 more than the Midwest.

Billy shrugs his shoulders when considering recent highs in the corn and soybean prices. "The egg market is contracted with retailers on a supply and demand basis at the store and really has no direct relation to what our end costs out here might be,” he says.

Regardless, feed conversion is constantly monitored. Ground feed from traveling conveyor hoppers is delivered in a tight bead onto the belts that continually pass the six levels of cages, which stretch the length of two football fields in each house. The chickens are fed four times a day and consume their limit at each feeding in 50 to 70 minutes. Fresh eggs are constantly conveyed onto another belt that heads to the grading and processing plant. A separate belt conveys manure, which is moved to the fertilizer processing plant twice a week.

On average, the chickens produce an egg every 26 hours. Chickens are in prime production for approximately two years, and there is a constant flow of replacement pullet hens to the tune of about a million birds each year.

The processing plant next door handles about 180,000 eggs per hour coming in from all houses on the farm. Eggs are automatically sorted by size, washed and sterilized. Cracked eggs automatically head toward the liquid egg production line. Sorted eggs are sent down respective lines and cartoned by machine. A sign above reads, "Carton dating is everyone's business!” 

In all, Hickman's Family Farms employs more than 200 people with another 75 contract laborers from the Arizona corrections system.

Keeping in Compliance. With the investment required for rapid, diversified growth, the Hickmans believe that administering compliance issues is vital to protecting their investment and leading position in the food industry. Three years ago, they created a compliance department. David Pineda, compliance manager, oversees a staff of five people who keep an eye on every conceivable compliance issue in the operation, including water quality, animal housing, worker safety, training programs, food safety and a myriad of other issues.

The Food and Drug Administration (FDA) is increasingly tightening compliance rules, Pineda says, in light of recent food scares, for one reason. Even fertilizer has come to be regarded as a food product by the FDA. "Oh, fertilizer is a whole compliance area in its own right,” Pineda says. 

Managing environmental and production compliance issues is as important to Hickman's Family Farms today as marketing, Glenn says. "If you don't have the resources to put into compliance, you won't be in the egg industry—the food production industry—down the line,” he adds.   

A Higher Level. As Glenn points out, his family has operated egg farms for 66 years. Each generation develops new strategies to stay in the game. He likes to remind people that "you can't run a business on a six-week horizon line.”

The pressures of meeting compliance issues related to food safety and waste management has made Hickman's Family Farms a better company because it has forced the business to operate on a higher level than ever before.

"It means we're ahead of the game,” Billy says. "The food industry is evolving unbelievably quickly. You either change or get out.”

Top Producer, March 2010