Bankruptcy Filing of Allen Foods Draws Comments, Offers of Help

HELP Senator Rich Colburn says Allen Foods, which filed for bankruptcy, is Talbot County’s second-largest employer behind Memorial Hospital in Easton. State officials say between 500 and 600 employees work at its Cordova poultry processing plant, not including farmers at Allen-contracted chicken houses. Colburn said that he has contacted state officials for help. The company’s 2,400 employees, meanwhile, are waiting to see what will happen to their jobs.

Governor Martin O’Malley announced that his administration will be working to assist employees and businesses impacted by the Chapter 11 bankruptcy filing of Allen Family Foods. The Maryland Department of Business and Economic Development, Talbot County Economic Development, Upper Shore Workforce Investment Board, and Upper Shore Department of Labor, Licensing and Regulation offices are prepared to offer a rapid response for displaced workers and assistance with job training, information on job retention/creation incentives and marketing any Maryland industrial properties.

O’Malley said the state is also working with the other poultry companies in Maryland to determine if they can hire additional employees and growers. The Maryland Department of Agriculture is looking into USDA programs that could benefit these producers as well including the Poultry Loss Contract Grant Assistance Program, which has provided up to $60 million in assistance to poultry growers whose contracts were terminated because of Allen’s bankruptcy. MDA is also in contact with Mid-Atlantic Farm Credit to determine available resources.

The poultry industry is Maryland’s leading agricultural sector, accounting for $640-million (40 percent) of farm income in 2009. Maryland broiler production ranked eighth among states in broilers produced in 2010. Most of the grain grown on Maryland’s Eastern Shore is used for chicken feed. According to the Delmarva Poultry Industry, Inc., poultry companies operating on the Delmarva Peninsula employ 14,700 people. There are more than 1,660 family farms that raise chickens in association with the five poultry integrators operating on the Delmarva Peninsula.

Allen Family Foods, based in Seaford, DE, was founded in 1919. An auction is scheduled at the end of this month to sell the company’s assets and the new ownership will determine the fate of the Cordova, MD plant.