By MATEUSZ PERKOWSKI

Capital Press

Business is booming at the Farwest Hatchery near Canby, Ore.

Owner Terry Cain expects his company to sell a half-million chicks in 2012, up fivefold from 2011, the hatchery's first year.

"We have more customers than we have eggs," he said. "We're trying to build as fast as we can to cover the market, but it seems to be swallowing us."

The mounting interest in local food production has prompted many cities to loosen their restrictions on keeping backyard chickens, fueling demand for poultry, he said.

"It's not just in the country anymore. People have them in downtown," Cain said. "Lots of people want to know where their meat and eggs come from."

Statistics from the USDA's Census of Agriculture reflect this growing fascination.

The number of egg producers with fewer than 3,200 layers shot up more than 60 percent between 1997 and 2007, to about 140,000 operations. Those with fewer than 50 birds accounted for most of the increase.

Meanwhile, the number of egg producers with flocks larger than 3,200 birds shrank 19 percent, to 4,000 farms. Such operations were responsible for a majority of U.S. egg production.

Demand for backyard chickens is cyclical, and often runs counter to the overall economy, said Gregg Dunlap, who owns the Dunlap Hatchery with his wife, Angie, in Caldwell, Idaho.

Hatchery business tends to spike when people have the sense of a national emergency, said Dunlap, whose family company dates back to 1918.

The oil crisis that ensued after major Arab exporters announced an embargo in 1973 resulted in a big spurt of demand for chicks, he said. "That was probably one of our best years."

The terrorist attacks of Sept. 11, 2001, prompted a similar response, as did fears about a potential "Y2K" technological meltdown in 2000, Dunlap said. "People wanted to be well-stocked up with supplies. We sold like crazy that year."

The common theme among backyard chicken enthusiasts is self-sufficiency, said Jan Belt, who co-founded the Belt Hatchery with her husband, Sid, in Fresno, Calif.

"Let me take care of myself," Belt said, summarizing her customers' typical attitude. "It's people who are independent and don't want to go with the flow."

Prospects weren't always optimistic for hatcheries geared toward small producers, she said. The Belts started their first hatchery in the mid-1970s but left the business in the early 1980s due to waning demand.

As more women pursued careers, raising poultry was no longer seen as practical, Belt said.

"You'd find there wouldn't be people at home to take care of the chickens," she said. "The market wasn't there. The interest wasn't there."

After a foray into the livestock auction industry, the Belts decided to launch another hatchery in the mid-1980s. That operation has continued, with their son Jim now at the reins.

The revival of demand for chicks was linked with the rise of the Internet, Belt said.

Not only did people became aware of how to obtain and care for poultry, but the hatchery's website allowed it to expand beyond California, she said.

Internet communities sprang up, leading to an "underground network" of small poultry producers who could share advice about regaining control of their food supply, she said. "It's healthy for our country."

Stephen Zauner, who has raised poultry for meat and eggs since 2005, said he was drawn to chickens because they're easier to manage than other farm animals.

"I can pick up a chicken. I can't pick up a cow or a horse. It's something I can handle with my own two hands," he said.

Zauner delivers eggs produced at his MZM Farm in Glenoma, Wash., to consumers and grocery stores in surrounding communities. The farm also raises poultry for meat.

The prevalence of small-scale egg production doesn't faze Zauner, who said his company has weathered local competition in the past.

People can perceive the poultry business as an easy way to make money until they realize how much work and investment is required to be commercially viable, he said.

"You have to meet a certain level to do what we're doing," Zauner said.

David Evans, a farmer on the Point Reyes Peninsula in California, said he's also not troubled by rivalry from other egg producers. In fact, he has helped former egg buyers set up their own backyard flocks.

The advantage is loyalty. Such clients are more likely to buy beef, pork, lamb and other meats from his diversified operation, Evans said.

"I have lost egg sales but I helped someone connect with their food," he said. "I'm ultimately in business to build relationships."

Poultry farming typically has lower barriers to entry than other forms of livestock production, which has the allowed the industry to flourish, he said. "The hatcheries are definitely the beneficiaries of this."

However, hatcheries that cater to small-scale producers are in a league of their own.

"It's really only a very small part of the overall poultry industry," said David Harvey, an economist at USDA who studies poultry.

Despite the popularity of small poultry production, it doesn't pose a threat to the major commercial industry, said Cain. "It's such a little bite, nobody's going to see it."

Most hatcheries are owned by large "integrators" that oversee chicken production from birth to slaughter, Harvey said.

On a national scale, hatcheries have become fewer but bigger.

Their number has fallen by 14 percent since the mid-1990s, to 312 operations, while capacity has risen 20 percent, to 895 million eggs in 2011.

"They produce so much chicken it dwarfs all these smaller growers," Harvey said.