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NCC Still Concerned Over Acreage Shift

Chicken Council evaluates the good crop news and the bad.

National Chicken Council officials are somewhat relieved by USDA's latest prediction for a 15% in this year's corn acreage. But Bill Roenigk, NCC senior vice president and chief economist, worries about the predicted drop in soybean acres. The poultry industry is a major buyer of soybean meal and corn.

"This is definitely a mixed report," Roenigk says. "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.

"Much will depend on the weather and other factors," he adds. "Even with the increased acreage, there's little doubt that corn will remain at historically high price levels.

Poultry economic impact

Rapidly increasing input costs has already shown up in wholesale prices for poultry. And, predicts Roenigk, it will "undoubtedly be passed on to consumers, sooner rather than later." The cost of producing a chicken has gone up 40% since last summer due to the run-up in corn prices.

NCC estimates that a total of 21 million new acres of corn will be needed in 2007 and 2008, given the ethanol industry's demand. "If 12 million new acres are planted this year, that leaves nine million needed for next year," he calculates. "At some point, we are going to run out of land and the ability to shift more acreage from soybeans and cotton into corn."

TAGS: USDA
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