The month of May has proved trying for large chicken producers as several major companies have encountered significant losses due to an influx in the cost of corn.
According to the Wall Street Journal on May 9th, 2011, the price of chicken feed has surged while the price of chicken has stayed fairly steady; therefore instilling a gap between the cost of feeding chickens and the price paid for the chickens when they are sold to factories. The cost of chicken has risen a mere 3.7% compared to the cost of beef which has risen nearly 20% since last summer.
Companies like Tyson and Pilgrim’s Pride have announced big first quarter losses due in part to the rising corn costs—a prominent feed ingredient—causing many companies to look elsewhere for animal feed ingredients. However, the influx in the cost of corn is not the only factor driving the increased cost of animal feed ingredients. The rising prices of gasoline also play a significant role.
“We typically get an uptick after Easter, but demand has been sluggish, probably due to the bad weather experienced in much of the country,” said Chief Executive Donnie Smith, during a conference call as reported by the Wall Street Journal. Tyson announced that many of their usual customers have cut back due to several reasons, one being the inclement weather, the other being the spike in gasoline prices. The influx in the price of gasoline has cut into customer’s budgets, forcing a cut back in their purchase of meat products. However, Tyson isn’t the only company struggling to keep their heads above water.
Pilgrim’s Pride, a duck manufacturing company with two plants stationed in Alabama, has suffered significant losses due to the devastating tornadoes that ravaged the south just a few weeks ago.
Pilgrim’s Pride lost power for several days at two of their Alabama plants due to tornadoes. Luckily, though, the plant damage was not as widespread as other companies throughout the southeast. But Pilgrim’s Pride and other chicken, duck and beef manufacturers have a bigger problem than just high feed prices and inclement weather—diversification.
When a company specializes in one specific type of production such as chicken or beef, and that market is waning, the whole company suffers. However companies like Tyson, who specialize in chicken but also dabble in other meat products, can focus on avenues other than chicken to help combat the increase in price and decrease in consumer spending. But it isn’t just US companies that are suffering. Foreign countries suffer as well.
Countries such as Asia and China are suffering from a spike in the price of wheat and rice, as inclement weather has affected their production as well. With the spike in staple grains affecting countries across the globe and the price of corn and gasoline surging, some companies are looking for other sources of animal and poultry feed.
Feed ingredient companies specialize in diverse selections of animal proteins and animal feeds that are not corn or chicken based. Varieties of other feed selections available include, but aren’t limited to, Meat & Bone Meal, Marine Feed, Aquaculture Feed and Feathermeal. Before settling for the more expensive option for your animal and poultry feed, consider other available options. Visit feed ingredient company websites and see what non-corn or non-chicken options they have to offer.
Lindsay Powell is a young professional improving her writing skills and finding inspiration around her.
Donate now! http://www.fida-pch.org/donate/ In May 2013 FIDA productive cooperatives Haiti and AVC lead the participant construction of 6 household chicken c…
Video Rating: 5 / 5
Find More Poultry Coops Articles