Lemmie Swann and son

Lemmie Swann of Talbot County has raised chickens for years as well as corn, wheat and soybeans. His sons, including Danny, 38 (right), run the family’s chicken houses now. (Baltimore Sun photo by Jed Kirschbaum / June 23, 2011)

On Maryland's Eastern Shore, everything leads back to chickens.

The poultry industry is the largest piece of a key sector of the local economy — agriculture — and its reach is broad: from the truckers who move products and the many farmers who grow corn for chicken feed to the corner stores and other businesses that rely on customers' income.

Any hint of disruption to that economic ecosystem makes people nervous. And these days, it's more than that.

The bankruptcy filing this month of Allen Family Foods, a Seaford, Del., poultry firm that provides direct employment to hundreds on the Maryland Shore, has left many more here worried about their future.

"It's not going to be good," said Lee Richardson, 40, a grain and poultry farmer in Wicomico County. "The question is just how bad. We don't know."

Allen, which hopes to sell nearly all of its assets, blamed the rapid price increases in corn. That's also a pressing problem for larger competitors such as Salisbury-based Perdue Farms and Mountaire Farms of Delaware.

Even as corn costs more than doubled in the space of a year, reduced demand for chicken has depressed the price that companies can charge.

"What this scenario does is highlight the fragile state of the poultry industry here in Maryland," said Earl "Buddy" Hance, the state's agriculture secretary. "Right now, we're in a market where every penny counts. When you're operating on pennies, it's very precarious."

Unemployment on the Eastern Shore runs higher than in Maryland as a whole, and jobs have been especially hard to come by since the recession. Unemployment in Somerset, Dorchester and Worcester counties has averaged more than 10 percent this year. It is not a region that needs another economic shock.

Mountaire is optimistic enough about the future that it is interested in purchasing Allen facilities. The Millsboro, Del.-based company wants to expand production by 400,000 birds per week.

But that increase is just one-fifth of Allen's production, leaving Allen employees and the farmers who raise the company's birds on contract in a scary place as they wait for the dust to settle.

Jenny Rhodes raises chickens in Centreville for Allen. She had expected that her two sons would take over when she retired.

"I've been in the poultry industry for 24 years and I never thought this is something I would be facing, I can tell you that," she said. "Never, never."

A major employer

With a 450-person processing plant in the tiny town of Cordova, Allen is the largest commercial employer in Talbot County. The company employs nearly 70 more people at a rendering plant in Dorchester County. Just over one-third of its contract farmers, about 90, are based in Maryland.

Hance, the agriculture secretary, is especially concerned about those farmers because chicken houses are expensive to build and upgrade — they are an investment that in most cases involves a long-term mortgage. And there's not much a chicken house can be used for if there are no chickens.

Several decades ago, the region was home to more than a dozen poultry companies, known as "integrators," that hatched eggs, trucked chicks and feed to farmers, picked up the grown birds and processed them.

With Allen planning to become a much smaller niche firm focusing on antibiotic-free chicken, the options for local farmers have shrunk to four: Perdue, Mountaire, Tyson Foods and Amick Farms.

State officials fear that Allen farmers who cannot land a new contract could end up following the company into bankruptcy — particularly if they have mortgages on their chicken houses.