Poultry industry can reap rewards from more corn acreage in South
Stability of poultry industry, logistics play role in competition for grain
BY ROY GRABER, BUSINESS EDITOR
;;As corn production expands in the Southeastern U.S., poultry
producers in the same region are likely to be in a good position to
compete for that grain supply.
Chip Flory, editor of ProFarmer, said he anticipates a signi;cant
increase in corn produced in Louisiana, Mississippi, Alabama, Texas
and Arkansas. With a large percentage of the broiler chicken industry being based in those states, it could bode well for poultry produc-
order. I think they’re in a pretty good position to compete.
“The ethanol industry is under a lot of stress, and it hasn’t been
able to pull corn in from other states or from overseas for that matter,” said Elam.
Logistics will also play a key role in where the grain ends up, just
as it has in the past.
“Last year, prior to September 1, we harvested about 1. 2 bil-
lion bushels of corn out of the South,” said Elam. “That stuff was
put directly into the usage channel, and a lot of that was used in the
Southeast. The poultry guys were competing for it and the southeast-
ern hog guys were competing for it. Just because of the location of
the corn, and the transportation costs it would take to get it into the
Midwest ethanol facilities, the southeast livestock and poultry indus-
try will compete for that corn.”
ers seeking the corn for feed. Added costs to ship the corn to other
regions and current struggles for the ethanol industry make poultry
producers’ odds even better.
An increase in corn production from the Gulf states could bode well
for poultry producers’ feed needs, since a large percentage of the
broiler industry is based in those states.
Southern shift to corn
Easing drought conditions in the Gulf states has made the situation for planting and growing corn more favorable for farmers there,
said Flory. And with corn carrying a greater pro;t potential than cotton, many farmers are making that leap.
“That area is well ahead of the pace from about a year ago,” said
Flory. “They’re putting a lot of corn in the ground down in the Gulf
states, and we’re losing cotton acreage. For the last couple of years,
guys have been walking away from cotton. This year, they’re run-
ning away from cotton.”
While Flory and Elam said that a lot can happen between now
and harvest time, they indicated that the supply will be greater in
those southern states, creating a demand for the grain. ;
Poultry’s competitive edge
Flory and Dr. Thomas Elam, president of FarmEcon LLC, both
said that the poultry industry in the Southeastern U.S. will be in a
prime position to compete against the ethanol industry and export
markets for the greater corn supply in those states. Both spoke
during the March 26 Grain and Meat Outlook Webinar, hosted by
WATTAgNet and Farm Journal.
The broiler industry has rebounded well after a couple
of rough years, Elam said, and its ;nancial stability will
play a role in competing for those harvested grains.
Elam. “They’ve got their balance sheets in fairly decent Watch the first in the Farm Journal/WATT “Grain & Meat Outlook” webinar series on demand at www.WATTAgNet.com/157129.html