Source: Tom Johnston, MEATINGPLACE, 4/30/14
 
The chicken industry is enjoying good net margins in today’s market, but it is only “one drought away from another economic crisis” given continued corn-supply volatility created by a federal mandate that is siphoning corn for ethanol, National Chicken Council’s Bill Roegnik told Congress today.

The House Ag Committee held a hearing in Washington D.C. to review the state of the livestock production industry, and stakeholders largely used the occasion to reiterate their pleas for a repeal of the Renewable Fuel Standard.

Roegnik, the NCC’s senior vice president and economist, called the committee’s attention to the lasting impact that the policy is having on the chicken industry, which he said has incurred more than $44 billion in higher actual feed costs since the RFS took effect in 2006.  

The result, Roegnik said, has been the ceased operations, bankruptcy or acquisitions of a dozen chicken companies from 2007 through 2013. Another two companies have been acquired so far in 2014, he said.
The chicken industry has only decreased production three times on annual basis since over the last five decades: two years in the mid-1970s and one more time in 2009 amid an economic recession that sent corn prices to the $8-per-bushel level.

“While corn prices have moderated somewhat this year from their recent record highs, the chicken industry is only one drought away from another economic crisis,” Roegnik said.

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