Bill Roenigk, senior vice president and chief economist of the National Chicken Council, said Friday that while the Council is encouraged by the USDA Prospective Plantings report that acreage planted in corn this year will increase 15 percent over 2006, the outlook is clouded by a predicted drop in soybean acres, since the poultry industry is a major buyer of soybean meal as well as corn.
“This is definitely a mixed report,” Roenigk said. “Twelve million additional acres in corn will help meet needs for feed, fuel and exports, although at a high price. But much of the increase is coming out of soybeans, also a critical crop for us.” The chicken ration typically consists of 70 percent corn and 20 percent soybean meal, with 10 percent minerals and other ingredients.
He added that planting intentions are not the same thing as a harvest.
“Much will depend on the weather and other factors,” Roenigk said. “And even with the increased acreage, there is little doubt that corn will remain at historically high price levels. The rapid increase in input costs has already shown up in wholesale prices for poultry and will undoubtedly be passed on to consumers, sooner rather than later.” The cost of producing a chicken has gone up 40 percent since last summer due to the runup in corn prices.
The council has estimated that a total of 21 million new acres of corn will be needed in 2007 and 2008, given the rapidly growing demand for corn from the ethanol industry. That industry has 114 plants in operation, seven being expanded, and 80 under construction, nearly all of which run exclusively on corn.
“If 12 million new acres are planted this year, that leaves nine million needed for next year,” Roenigk said. “At some point, we are going to run out of land and the ability to shift more acreage from soybeans and cotton into corn.”
The National Chicken Council represents integrated chicken producer-processors, the companies that produce, process and market chickens. Member companies of NCC account for approximately 95 percent of the chicken sold in the United States.