NCtrend: Turkey trot

 In 2015-01

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by Alex Granados

When House of Raeford Farms Inc.’s turkey plant closed its doors in December, Raeford joined Kannapolis and Thomasville among North Carolina cities that have lost their signature businesses. Cannon Mills Inc. closed in 2003, while Heritage Home Group LLC, which recently moved its headquarters to High Point, closed Thomasville Furniture Industries Inc.’s operations in 2013. The Raeford plant’s demise eliminated 400 jobs after the company in August 2013 shut down its turkey-slaughter plant, where 950 had worked. “I think closing either one of the plants over there has been difficult for some of the family members that were in charge. Because as far as processing goes, that’s where it started,” says Dave Witter, House of Raeford’s corporate communications manager.

The company, originally called Johnson Brothers, started in the late 1940s. Marvin and Bizzell Johnson sold turkeys grown by their parents to residents of Rose Hill, a Duplin County town 90 miles east of Raeford. Bob Johnson, 56, Marvin’s son, is the president and CEO, and several other family members work at the company, which always has been based in Rose Hill. The company moved into chicken processing in 1959 and launched House of Raeford in 1975 after Marvin Johnson bought out his four partners in a turkey-slaughter cooperative in Raeford. While turkeys once dominated the company’s business, rivals — including Garner-based Butterball LLC, which has a hatchery in Raeford — have gobbled up market share. By 2013, about 90% of House of Raeford’s sales were chickens, with the company ranking ninth among U.S. producers, according to Rockford, Ill.-based Watt Global Media, an industry research firm. Without its own slaughter plant, the company relied on other vendors for raw turkey, an expensive proposition that didn’t work financially.

It’s a heavy hit for Raeford, where the cook plant alone accounted for 7.6% of the $445.6 million property base, City Manager Dennis Baxley says. The two plants, which generate more than $140,000 in annual tax revenue, are the most valuable property in town except for Englewood Cliffs, N.J.-based Conopco Inc., a subsidiary of Unilever PLC. The latest closing “just adds insult to injury,” Baxley says. “But all is not lost. We’re keeping our fingers crossed and taking steps that we can try to market it.” Hoke County has benefited from expansions at the U.S. Army’s Fort Bragg base, home to Airborne and Special Operations Forces, and had an unemployment rate of 6.6% in September, slightly better than the state’s 6.7% rate.

The Elizabethtown-based Southeastern Economic Development Commission, which works to bring jobs to the region, is looking for a buyer for the 255,000-square-foot cook plant, which was built in 1996, Baxley says. The slaughter plant is still unsold. The company has seen some interest in the cook site, but Witter declined to discuss details. “The impact of both closings are tremendous when you look at the fact that, in a low-wealth county like this, when you lose one job, that’s too many,” says Donald Porter, executive director of the Hoke County Economic Development Commission. “It’s really a regional impact, because we had people coming from as far away as South Carolina to work there.” There’s one bittersweet silver lining for the town — House of Raeford has no plans to change its name.

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