The poultry industry is, generally, not yet changing its feed formulations in response to above normal corn and soybean prices.
In the second quarter of 2021, 60% of respondents to the WATT/Rennier Poultry Confidence Index survey said they are not yet making changes in response to higher-than-normal costs for feed inputs.
As part of the quarterly survey, WATT Global Media asked additional questions about the state of the poultry industry as well as emerging trends, technologies and challenges. This blog post reflects the results of the supplemental questions included in the first quarter survey conducted in May 2021. The next installment of Greg Rennier’s column reflecting the results of the survey will be published in the August 2021 issue of WATT PoultryUSA.
High feed costs
Significant declines in production of corn and soybeans, coupled with strong demand, is leading to persistently high feed costs in animal agriculture and signs point toward potentially higher feed costs in the future. Feed is the most expensive input in raising poultry. That cost is typically covered by the integrated poultry company.
We asked, “Which of the following are you doing or will soon do to reduce feed costs due to higher corn and soybean prices? (Check all that apply)”
- 60.3% responded, “None of the above.”
- 20.6% responded, “Substitute other grains for corn.”
- 17.5% responded, “Decrease use of additives or switch to less expensive options.”
- 12.7% responded, “Another change not listed above.”
- 9.5% responded, “Decrease caloric density.”
- 9.5% responded, “Increase use of enzymes.”
- 7.9% responded, “Increase use of distiller's dried grains with solubles (DDGS)”
We also asked, “Have you taken or will soon take any of these actions in response to increased feed costs? (Check all that apply)”
- 81.3% responded, “None of the above.”
- 10.9% responded, “Reduce chick placements.”
- 9.4% responded, “Reduce bird weights.”
- 6.3% responded, “Cull breeder flocks.”
A chicken shortage?
In early May 2021, some reports surfaced of a shortage of cuts needed to supply chicken-focused quick serve restaurants like KFC and Wingstop. A variety of factors, such as exceptionally harsh winter weather in the southern U.S. and the global COVID-19 pandemic, contributed to supply chain challenges.
We asked, “Recent news reports have documented a shortage of chicken products like wings and breast meat fillets. Are you adjusting bird weights in response to these shortages?”
- 61.5% responded, “No.”
- 23.1% responded, “Not yet, but it’s being discussed.”
- 9.2% responded, “Yes.”
- 6.2% responded, “Not yet, but we soon will.”