For corn growers who have forgotten old customers, this message:
It’s well documented that chicken producer margins have suffered during the past 18 months or so which has caused them to cut production. Chicken production for the better part of 2009 has been trending 5% plus below year ago levels. 2009 will almost certainly mark only the fourth chicken output decline since 1961 and by far the steepest. A decrease of around 1.5 billion pounds is anticipated this year which is roughly 6 times more than any other decline since 1961. In short, an historic slowdown in chicken production is occurring. When will chicken output turn around? Probably not anytime soon. Yes chicken breast and leg quarters have risen as of late, but so have feed prices hurting producer profitability. The 2009/10 crop corn and soybean planting remains behind and supplies for both products are anticipated to remain historically tight for the foreseeable future. [More]
This is my contention with ethanol-worshipers - we have enlisted our government to help us screw reliable buyers of our production. Heck, we'd starve our entire livestock industry if we could get a 50% blend mandate.
The market, not K street lobbyists should allocate corn supplies. There is responsibility chain that parallels the production chain. All of us are free to finagle what we can from our political process, but the short-sightedness of pushing our livestock industry to the brink just because we can seems wrong to me.
All we have accomplished, I think, is raise our input prices and fixed costs. In fact, corn farmers have slipped into a role as little more than a conduit between corn buyers and input suppliers - who are remarkably more market savvy than we. Between seed and fertilizer vendors, landowners who can read the media, and competition who can see the bigger picture, producers have built their own future though government fiat without asking if they were capable of being a part of it.
We are now officially tools.