Fieldale Farms Corporation History

Address:

P.O. Box 558
Baldwin, Georgia 30511
U.S.A.

Telephone: (706) 778-5100
Fax: (706) 778-3767

Private Company
Incorporated: 1972
Employees: 4,010
Sales: $360 million (1996 est.)
SICs: 2015 Poultry Slaughtering & Processing

Company History:

In 1995, the Atlanta Journal and Constitution reported that Fieldale Farms Corporation was the sixth largest privately owned company in the state of Georgia. The company, which is a "fully integrated" facility for processing of broilers--that is, whole chickens smaller than 2.5 pounds dressed weight--oversees its product at every stage. Chickens are bred at 700 different Fieldale breeder farms, hatched at one of four Fieldale hatcheries, fed with the product of Fieldale field mills, and--once slaughtered&mdashe processed and packed at one of Fieldale's three processing plants in north Georgia. The information appeared in a special report on Georgia companies, and it seems to be one of the few times in the 1990s that the Journal and Constitution offered a positive report on northeast Georgia's largest privately owned company. Much of the other coverage on Fieldale related to environmental complaints and a state ethics imbroglio; but unquestionably Fieldale was a business with a significant dollar volume, which provided a number of jobs to people in its areas of operations.

Hatfield and the Arrendale Brothers

Long before I-985 was built in the 1980s, making the northeastern corner of Georgia a popular recreation spot and a way-point for vacationers headed to the Smoky Mountains of Tennessee and North Carolina, the Arrendale brothers began the business that would become Fieldale. Tom and Lee Arrendale were born in Rabun County, in the tip of the state near the joint border with North and South Carolina, in the 1920s. Tom attended Lakemont Consolidated High School, later studying at Georgia Tech, and during World War II, he served in the Army Air Corps. After he returned to north Georgia, he began a career in the poultry business as Lee's partner. In January 1946, the Arrendale brothers went into business together growing live broilers, and eventually they would become involved in chicken processing as well.

The Arrendales had their operation in Clarkesville, county seat of Habersham County; further south lay Gainesville, a much larger town which served as the county seat of Hall. In the early 1950s, Joe Hatfield moved to Gainesville, and also became involved in the poultry industry, working first in the processing and then the marketing areas. He and several partners established a processing company that they called Gainesville Fryers.

Throughout the 1950s, Hatfield with Gainesville Fryers, and the Arrendale brothers with their farms and processing facilities, continued to prosper. But by the end of the decade, the poultry industry entered a slump, and both the Arrendales and Gainesville Fryers were hit by potentially hard times. By the beginning of the 1960s, all three men faced difficult choices.

Ralston Purina and the Founding of Fieldale

In 1961, Tom and Lee Arrendale made what must have been a difficult decision, opting to sell their business to Ralston Purina. The latter, a large and well-known company with interests in many geographic and commercial areas, had begun to move into the northeast Georgia poultry processing business, and in September 1961, the Arrendales sold all their interests to Ralston Purina. At around the same time, Hatfield and his associates reached a similar decision, and they too sold their company to Ralston Purina. Not only that, but all three men went to work for their former companies' new owner.

Thus Tom Arrendale became the general manager for Ralston Purina's Clarkesville operations, while Lee took the general manager's position for their Gainesville facilities. Hatfield, on the other hand, was assigned the job of general manager of southeastern poultry operations. During the 1960s, Ralston Purina's poultry enterprises in the area expanded, and partly on the strength of its lucrative north Georgia business, by the latter part of the decade it became the world's largest producer of broilers.

Yet the company's leadership decided in 1971 to sell off all its poultry operations in the United States. Learning of this, Hatfield and the Arrendale brothers, along with other associates, decided to take advantage of the opportunity to gain a sizable share in the broiler operation, and purchased the entire northeast Georgia operations of Ralston Purina. The three entrepreneurs had been forced to sell their companies and go to work for a large corporation; now, almost exactly a decade later, they were about to take control once again, this time of a larger company. Combining parts of both last names, they dubbed their corporation "Fieldale," and began operations under that name in February 1972.

Growth and Jobs

The three businessmen, already leaders in their communities, became some of the wealthiest men in the northeast region of Georgia. They were recognized for their contributions: Tom Arrendale, for instance, won numerous awards from local organizations, and became a member of the board of directors of a prominent local bank. Fieldale had emerged as the largest of the homegrown local businesses, and its economic impact was enormous.

Poultry, always more viable than traditional farming in a mountainous area that did not have particularly rich soil for growing crops, provided numerous jobs in the surrounding counties. First there were the farmers, who grew chickens in large chicken houses; then there were also the employees in the processing plants. Thus poultry could be said to span a variety of businesses from agricultural to industrial, and from the viewpoint of owners, it was an extremely lucrative enterprise. From the perspective of potential employees, some in white-collar positions and many more in blue-collar processing jobs, it meant employment; and there were far more people outside the company, including the affiliated chicken farms, who benefited from their relationship with Fieldale.

Circumstances in the 1980s seemed to coalesce to Fieldale's benefit. A trend toward health-consciousness had made chicken an increasingly more popular source of protein, as opposed to beef and pork. Waves of immigration, a result of the spread of Communism in Southeast Asia, and later an economic crisis in the Texas oil industry, respectively brought large numbers of Laotians and Mexicans to the region. In many cases, these people were willing to work at jobs unpopular among the area's mostly white population of American citizens, either because these jobs paid poorly, or because they involved unpleasant activities, or both. Hence in 1996, the Atlanta Journal and Constitution reported that chicken-processing jobs, which seldom paid more than $6.50 an hour, were mostly filled by Mexican and South American immigrants. "I don't think anyone says, 'After graduation, I want to get a job in the blood room at Fieldale,"' a Hall County Chamber of Commerce spokeswoman told the Atlanta Constitution.

But to high school students and unskilled workers, jobs in the processing plants such as the one in Cornelia, near company headquarters in Baldwin, represented an opportunity that might not have existed elsewhere. Clearly Fieldale was having a strong economic impact on the community; in the 1990s, however, the region's growing prosperity ironically helped to raise concerns about the environmental impact Fieldale was having on northeast Georgia.

Troubles in 1990

The company suffered two blows in 1990, the first of which came early in the year, when Lee Arrendale was killed in a plane crash. Later a nearby school, as well as a road, were named in his honor; and in 1994 the local rotary club would award Tom Arrendale its "W. Lee Arrendale Award for Vocational Excellence."

The other blow of 1990 came later in the year. On December 1, 1990, the Journal and Constitution ran an exposé on alleged dumping of wastewater by a Fieldale facility in the tiny community of Murrayville, in Hall County. In October, the State of Georgia had fined the company $100,000 for illegal discharge of "thousands of gallons of sewage" into streams that ultimately fed into Lake Lanier, one of the north Georgia region's largest lakes, and a popular recreation spot.

Chicken processing is messy work, and the paper reported that for every chicken processed by the plant, "three gallons of clay-colored water--dyed by blood, guts and millions of feathers" was produced as well. This wastewater was supposedly treated, then sprayed onto pasture land for fertilizer. But according to several former employees, the water was actually being dumped, sometimes under cover of night, into Lake Lanier.

Fieldale executives responded that it was true that their plant, which was processing a million chickens a week, had reached its legal waste disposal limit. Because of high production rates, they said, they were nearly at capacity in their 115-acre disposal field; but, they claimed, they had not exceeded capacity. After being fined in October 1990, the company had cut production levels. "We have these [production] lines up there because they make us money," the plant's wastewater manager told the paper. "When they're sitting idle, they lose us money. I'd say that's a gesture of good faith right there."

The charges of illegal waste disposal activities, according to Fieldale executives, came from disgruntled ex-workers with ulterior motives. And in fact one of the two former employees making the charges had been fired for fighting. But scientists and state officials had confirmed signs of heavy environmental impact. Biologists who studied the lake--which among other things is a source of drinking water for metropolitan Atlanta--reported that the area near the plant was "aging" faster than any other section along the shores of Lake Lanier.

After complaints by neighbors, an official with the Georgia Department of Natural Resources (DNR) had conducted an inspection, and found the company guilty of violations, which had resulted in the $100,000 fine. Fieldale, which had invested $2 million in a new treatment system in 1989, had applied for permits from the county and state to expand its disposal fields. Neighbors, officials, scientists, and certainly the company's leadership hoped the problem would be alleviated.

Continuing Controversy in the Mid-1990s

In 1993, Fieldale ran into another problem, but this time the accusation was dirty politics rather than dirty water. Tom Arrendale, whose company had contributed $10,000 to the election campaign of Governor Zell Miller in 1990, had paid to fly two state legislators, along with Georgia Agricultural Commissioner Tommy Irvin, to Daytona, Florida, for the Daytona 500 auto race. When the media learned of this, they raised an uproar at the apparent attempt to buy influence; but according to a loophole in the state law, the three officials were not legally required to report that they had been the beneficiaries of Arrendale's hospitality.

The "loophole" had been left in the law because, as the newspaper stated, members of the Georgia General Assembly had held that "People such as bank presidents and hardware-store owners... ought to be able to take their local legislators to lunch without having to register as lobbyists and file disclosure forms." But according to the Atlanta paper's editorial, Arrendale had taken advantage of the law to woo the legislators, one of whom was the head of the state's Environmental Protection Division. And since he was technically not a lobbyist, neither Arrendale nor the public officials were required to report the Daytona junket.

The editorial at least judged as true the claim by Arrendale and the officials that they discussed no politics on the trip: "Talking politics on such trips is considered impolite, because it shatters the fragile illusion that it's an outing among friends. It is only later that friends begin to help each other, as friends are wont to do." In December 1993, another editorial called on the state's general assembly to "Close the Fieldale Farms Loophole," and said that doing so had become legislators' "top ethics-reform priority" in 1994.

Nor was this the end of Fieldale's troubles in the 1990s. Years before, Arrendale and Hatfield might never have imagined that their company would get attention from the New York Times, but when it happened, it was not pleasant. Under the heading "Chicken Farm's Food Is Banned," the paper reported that certain school districts had banned use of food provided by Fieldale Farms after one of its shipments was found to contain bone and cartilage.

In 1996, the company made headlines in another prominent national paper, the Wall Street Journal, but again the reasons were not good. This time the cause was a lawsuit filed by the company against Franklin County, Georgia, because the latter had established an environmental ordinance--more stringent than existing state law&mdashø keep a Fieldale plant out. Throughout Georgia and beyond, businesspeople, government officials, and citizens' groups took notice of the lawsuit, which would determine much about the relative powers of businesses, local governments, and state governments. Economic growth in the region, it turned out, had created a prosperous local economy in which people could afford to have concerns for the environment, and not merely their pocketbooks: "Franklin County officials say that 10 years ago they never would have considered passing an environmental ordinance." But now, thanks to growing prosperity in north Georgia&mdash′osperity for which, ironically, Fieldale could claim some share of the credit--Franklin County was keeping Fieldale out in favor of the cleaner, better-paying jobs being offered by auto-plant supply manufacturers, including makers of windshield wipers and exhaust systems.

Coming of Age with Its Community

Around the same time as the Wall Street Journal article, in April 1996, the Journal and Constitution's "Southern Economic Survey" reported what appeared to be a telling fact. The town of Gainesville, in preparation for hosting visitors to Olympic rowing events on Lake Lanier that summer, was painting over the water tower in the center of town, thus obscuring the slogan it had carried for a quarter of a century: "Poultry Capital of the World." Gainesville still had a strong interest in poultry, its mayor told the paper, "but we're so much more than that."

Clearly the news from Gainesville and Franklin County indicated that north Georgia was coming of age, and was more resistant to the influence of Fieldale and other firms involved in the region's large chicken processing industry. Just as Fieldale had benefited from social changes in the 1980s, now it seemed to be suffering from changes in the 1990s, particularly a growing concern for the environment, worries over the health hazards posed by chicken, and the growth of north Georgia from an out-of-the-way mountain region to an adjunct of metro Atlanta.

But reports of the eclipse of the poultry industry were highly exaggerated. In its economic survey, the Journal and Constitution went on to report that in Hall County, the poultry industry alone--of which Fieldale was a part, along with ConAgra and other companies--put $145 million into the county's economy. And "This one-county poultry farm income," according to Abit Massey, executive director of the Georgia Poultry Federation, "is larger than the combined statewide income for peaches, pecans, apples, blueberries, grapes, and onions." This claim is impressive, particularly considering that the first of the fruits named is the one most commonly associated with Georgia.

Further proof of Fieldale's stability was offered by its continued growth. In 1994, the trade journal Feedstuffs reported that Fieldale and another company were spurring a "building boom" in the Southeast, and that Fieldale planned to build 110 broiler houses in Georgia and South Carolina within a short period of time. In 1995, in its survey of Georgia's leading private companies, the Journal and Constitution reported that sixth-place Fieldale Farms had contracts with 700 chicken growers in two states, and that it operated three processing plants, four hatcheries, and a feed mill.

Fieldale Farms Corporation History

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