WATT PoultryUSA - June 2013

2 ; WATT POULTRY USA

;;Editor’s Comment BY GARY THORNTON

Renewable Fuel Standard is the one thing
that gets under a poultry producer’s skin

;;What business worries keep poultry producers awake at night? Is it the $8-a-bushel corn prices paid during much of the past year? Or is it the challenge of managing risk when prices are extremely volatile?

Lampkin Butts, president and chief operating of;cer,
Sanderson Farms, says worry is counterproductive — be-
ing prepared is the key thing.;
“You just have to be prepared to deal with the prices that come along.
Because our business is cyclical it is important to have a strong balance
sheet. So you don’t stay awake at night worrying about this. You weather
through the economic storm,” he told listeners at the Chicken Media
Summit.;
“In early spring of 2012 everybody was optimistic that the industry was
going to get some relief from high corn prices,” he said. “Then by June,
there was the drought in the Midwest and the corn crop did not materialize.
Instead of 164 bushels per acre, the corn yield ended up being 124. And we
were right back to expensive grains.”;
There are things, however, that can quicken a poultry producer’s opti-
mism or, on the other hand, just plain get under his skin.;
On the plus side, there’s bound to be favorable corn-growing weather
and an uptick in the general economy in the same year at some point. When
this occurs, there will be a pro;table run for the meat and poultry industries.;
It’s one thing to live with the vagaries of weather but something quite
different to be on the wrong side of governmental policy. Namely, the gov-
ernment’s intervention in corn markets that favors the use of corn by the
ethanol industry over that of the other uses like meat and poultry produc-
tion.

“This industry understands competition, but we would like for it to be on a level playing ;eld,” Butts said. “We would like to have the market determine where the corn supply is used,” he added.

Whether the industry gets relief from high corn prices in 2013, the Renewable Fuel Standard has cost the industry billions of dollars in incremental feed ingredient costs and consumers billions in added food costs. ;

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