NC Hog & Poultry Producers Probably Won

It’s the cruelest twist of fate; what began as possibly one of the most profitable years hog and poultry producers would have seen in several years has all gone with the wind, or dry wind as it were, with the persistent drought conditions in the Midwest. Kelly Zering, Associate Professor and Extension Specialist in Ag Economics at NC State:

“At the start of the corn growing season it looked like meat and poultry prices would be high enough to cover these grain prices, but now that profit margin has disappeared for most, and now the issue is looking ahead to actually find the supplies of grain that they need.”
 

US producers, nationwide, planted one of the largest corn acreages ever. But now:
 

“All of a sudden what looked like one of the largest corn crop ever, now looks like a corn crop that wont be able to satisfy all the demands that had been put in place at the start of the year.”
 

With all different demands on corn, Zering says that rather than a weak link breaking, all areas will have corn, just not as much:
 

“I don’t anticipate any particular one giving, it seems that everyone is looking for ways to substitute something else or reduce their usage. That includes the ethanol industry, the export market, and then the livestock industries.”
 

if high grain prices persist, Zering says that rather than reducing head count, market weights for live animals will probably go down:
 

“In the past, if the very high prices are combined with low product prices then you see the least financially sound companies cutting back or going bankrupt. I think there will be more cutting back of market weights and a lower supply of meat and poultry products meeting the grocery shelves.”
 

Earlier in the year, grain sorghum acres were all the talk to help reduce the need for high priced corn for livestock feed. Zering says that any increase in grain production is a good one:
 

“Increased grain production in North Carolina will help the hog and poultry industry here because it provides a nearby source. There is less uncertainly about that grain being available. It’s a real opportunity for North Carolina crop farmers to increase their revenue.”

NC State Associate Professor and Extension Specialist in Ag Economics Kelly Zering