Everyone from family poultry farmers to large poultry companies has been hit hard by the rising prices and short supplies of corn, said Michael Welch, National Chicken Council spokesman and chief executive of Harrison Poultry.
“The [U.S. Department of Agriculture’s] report earlier this week confirmed that it will be much more difficult this crop year to secure an adequate supply of feed ingredients that can be procured at a cost that is both manageable and predictable,” said Welch to the Livestock, Dairy and Poultry Subcommittee of the House Committee on Agriculture. “The more than 40 vertically integrated chicken companies that comprise the broiler industry have financially struggled for the past four calendar quarters. A number of companies have succumbed to the severe cost/price squeeze by ceasing operations or having to sell their assets at fire-sale values.”
The price of corn began to rise in the fall of 2006, and since then, the broiler chicken industry alone has had to spend an extra $22.5 billion in higher feed costs, said Welch, putting companies under severe financial stress, pushing some out of business and causing others to reduce production. Welch said Congress should allow animal agriculture producers to compete more fairly for the limited supplies of corn expected over the next few years. “Included in this effort must be a ‘safety valve’ to adjust the Renewable Fuels Standard when there is a shortfall in corn supplies,” said Welch. “In addition, a plan should be implemented to allow a reasonable number of good, productive cropland acres to opt out of the Conservation Reserve Program on a penalty-free basis.”