After experiencing six consecutive years of feed grain market turmoil, the poultry industry is wondering if grain stocks will rebound and poultry demand will be strengthened in 2013. The article, "Grain prices and poultry demand: Searching for the new norm," which can be found in the April edition of WATT PoultryUSA and online, takes a look at the industry's economic factors.
High on the list of economic concerns is the inventory of corn in the United States and the supply's impact on feed prices. Some don't see the levels of U.S. corn stocks being high enough to lower the cost.
"In order to fulfill the 15 billion gallon (Renewable Fuel Standard) mandate for ethanol, to produce to meet the potential demand for meat and dairy products in this country, and to restore U.S. supply for export markets to about 2.2 billion bushels a year, we need corn crops of 95 million-plus acres at 165 bushels an acre in every year as far as the eye can see. That's not going to happen. There is not the potential in corn agriculture to make it happen," said industry economist, Dr. Thomas Elam.
But Terry Barr, senior director of industry research at CoBank, has a more optimistic look at feed prices. "Significant amounts of new production of coarse grains are beginning to come into the market, so inventories may be rebuilt faster than thought," Barr said.
The WATT PoultryUSA article also takes a look at the poultry industry's other financial factors including a potentially higher demand for animal proteins, poultry's price advantage over red meats, and the relationship between disposable income and meat consumption.