IPC: Feed grain costs negatively impacting poultry production

Significant increases in the cost of wheat, corn, soybeans, barley and other grains used in the manufacture of poultry rations are having a negative impact on the cost of poultry production around the world, and will inevitably lead to higher prices of poultry meat in the global marketplace.

Members of the International Poultry Council (IPC) are strongly concerned about the rising cost of feed grains on world markets. These high costs cannot be absorbed by greater efficiencies within the production chain alone, and must be passed on to the consumers through higher prices for poultry.

Feed is by far the largest cost in getting chicken, turkey, and duck meat to the consumer’s table. Depending on the country, poultry feed is composed of a combination of either corn, soy, wheat or barley. The cost of corn and wheat has increased approximately 50% in the last four months, while the cost of soybean meal has risen about 20%. Grain prices are unusally volatile in world markets, and could go even higher depending on the outcome of the Northern Hemisphere harvest.

Several factors have contributed to higher grain prices this year: a drought in Russia that dramatically reduced the wheat harvest in that important wheat-producing country; too much rain in the US that reduced soy and corn yields; and a delay in planting in Brazil. Improved weather conditions in 2011 could well bring grain prices down from recent highs and eventually lead to lower meat prices.

Although poultry prices will inevitably rise if grain prices remain high, the impact will be significantly less for poultry than for competing meats because of poultry’s inherent efficiencies in feed conversion ratios. Therefore, poultry meat prices are likely to rise less than the prices of competing meats.

The IPC is the representative body of the world poultry meat industry and trade. Its 24 member countries account for 81 percent of world poultry meat production. The IPC is officially recognized by the Food and Agriculture Organization of the UN, the World Organization for Animal Health (OIE), and the Codex Alimentarius Commission.

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