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River Transportation and the Broiler Industry in 

North Alabama: A Descriptive Analysis (Summary)

Agricultural 

Marketing 

Service

December 2019

OVERVIEW AND CONTRIBUTIONS

This report examines the effects of a hypothetical total loss of waterborne shipping to Northern Alabama. A 

major way the economy would be affected, the report’s authors argue, is by the loss of the broiler industry 

in the region, which depends on the waterways to remain viable. Because barge is the lowest cost means of 

obtaining grain feed for the poultry industry, lock failures that prevented the barge use would result in costs 

high enough to drive poultry producers to leave the region. The loss of this industry’s contribution to the larger 

economy will precipitate large negative economic consequences. The authors estimate the impact to the 

economy based on 2016 economic activity related to the poultry industry. 

METHODS AND DATA 

The authors describe a scenario in which all broiler production has ceased in Northern Alabama due to 

increased feed costs caused by a cessation of barge traffic. Barge traffic provides a low-cost means of obtaining 

the grain necessary for feeding chickens, with an estimated savings of $7-$10 per ton near the Port of Decatur 

and $2-$4 savings near the Port of Guntersville. Barge traffic could cease due to a complete lock failure at the 

Wilson or Pickwick facilities (fig. 1), both of which were built in the first half of the twentieth century and were 

designed for a 50-year operational lifespan. First, the authors establish why the industry would collapse in the 

absence of waterborne commerce. They conclude that the increased costs and reduced shipping capacity for 

feed grains associated with a switch to other possible modes—truck and rail, including portage around failed 

locks— would be catastrophic to the industry. They then evaluate the economic impact of this industry.

This is a summary of “River Transportation and the Broiler Industry in North Alabama: A Descriptive Analysis” 

by Larry G. Bray at University of Tennessee - Knoxville and David P. Vogt at Decision Commerce Group, LLC. 

Funding for this paper came from the Agricultural Market Service (AMS) through cooperative agreement 

number 17-TMTSD-TN-0011. The full paper is available at:

https://ctr.utk.edu/CTR-research/USDA_17-TMTSD-TN-001_final_report-2.pdf

Kelly Nelson
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Location of the Alabama Broiler Farms

About half of all Alabama poultry sales occur in the counties located either on the Tennessee River or one 

county removed from the river (fig. 2). Moving out from the river, field interviews suggest that the economic 

trucking distance from river terminals generally is not more than 100 to 125 miles. The two circles in figure 

2 define the Alabama and Georgia counties that lie within 100 and 125 miles of the ports of Guntersville and 

Decatur, Alabama. Shipments generally move from the river terminals to the feed mills by truck and then on to 

the poultry farms, also by truck.

The data are reported as the number of poultry sales and percentages of the total poultry sales (by State) from 

the ports of Decatur and Guntersville, Alabama. One salient finding is that, whether measured from Decatur 

or Guntersville, approximately 690 million Alabama broilers were sold in 2012 within a 125-mile radius of each 

port city. As Conner (2017) noted, the development of the poultry industry in Northern Alabama required 

the import of Midwestern corn to supplement local feed grains. While some corn and soybeans are grown in 

northern Alabama, the amount produced is insufficient to meet the demands of the poultry industry in the 

area. The industry still needs Midwestern grain imports to sustain its current production levels.

Figure 1. River Infrastructure in Nothern Alabama
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Economic Impact Analysis

To measure the consequences of the lack of barge traffic, the authors perform an economic impact analysis 

using a new method based in an input-output approach (of which IMPLAN is likely the best known). Their new 

analysis technique, the Decision Commerce Group Contribution Model, focuses on assessing the current contribution of economic activity from existing industry rather than the gain from new industry. The authors look 

at both the industry’s State-level contributions and its county-by-county numbers. They calculate purchases, 

gross-domestic-product contribution, wage contribution, and employment contribution.

FINDINGS AND CONCLUSIONS 

A significant share of the poultry production and processing activities reside in Northern Alabama and depend 

on waterway shipments of grain. This study suggests a loss of the poultry industry would have serious effects 

on Northern Alabama. In 2016, the Northern Alabama poultry industry and its supply chain contributed about 

6 percent to the overall State economy and about 9 percent of the total regional economic output. Based on 

estimates developed in this study, the region’s industry contributed about $19.8 billion of the State's total 

poultry sales of $239.9 billion—or about 8 percent to the State’s economy in 2016. 

Figure 2. Alabama Counties with 125 of Guntersville and Decatur, AL
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The authors found that, in 2016, the poultry industry in the region directly or indirectly contributed from 

roughly 3 percent to over 52 percent of private economic activity in counties within the region of interest. Of 

the 35 counties in the region, 14 depended on the industry for over 10 percent of their total economic activity, 

and 9 of these were highly dependent, with contributions above 20 percent. A loss of the waterway shipment 

of grains to these areas would likely have severe consequences for a diverse set of industries that supply the 

poultry industry. It would also severely affect the regional economy overall because of a reduced economic 

activity due to lower household income.

REFERENCES

Burton, Mark L. 1995. “Rail Rates and the Availability of Water Transportation: The Missouri Valley Region,” 

Review of Regional Studies 25(1).

Conner, David. “Poultry Industry in Alabama,” Encyclopedia of Alabama, 2017.

Decision Commerce Group. “Industry contribution app.” 

U.S. Bureau of Economic Analysis, “Input-Output Accounts Data.”

Perry, J., D.E. Banker, and R. Green. 1999. Broiler Farms’ Organization, Management, and Performance, 

A1B-748. U.S. Department of Agriculture, Economic Research Service.

U.S. Department of Agriculture, National Agricultural Statistics Service. 2017 State Agriculture Overview for 

Alabama.

PREFERRED CITATION: 

Bray, Larry G and David P. Vogt. River Transportation and the Broiler Industry in North Alabama: A Descriptive 

Analysis. University of Tennessee, Knoxville. December 2019. 

Web. <http://dx.doi.org/10.9752/TS245.12-2019>

Photo credit: USDA 

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