March 29, 2012

US poultry output rise signals strong corn demand

Resurgence in the US poultry industry and the subsequent increased demand for feed have led to rising corn demand in February, according to an USDA report.

With broiler and young turkey slaughter up 3% and 7% over last year at this point respectively, the ProExporter Network estimates that US poultry will consume more than 1.2 billion bushels of corn this marketing year, driving roughly 9.5% of total US corn demand. Estimates of corn demand from poultry are almost 30 million bushels higher than 2010-11 marketing year.

"With all of the strong indicators coming from the dairy and animal sectors, it may seem repetitive, but sustained success in all sectors is crucial to a healthy agricultural economy," said NCGA President Garry Niemeyer. "With the poultry, cattle, swine and dairy sectors all reporting evidence of positive trends, we see a strong future for corn with growing demand for the crop which we continue to produce at near-record levels while decreasing inputs such as fertilizer and chemicals."

Despite a slight drop in broiler slaughter and chicken average live weights from January 2012, the industry appears stronger than it did at February's end 2011 with slaughter 3% higher and comparatively higher average live weights. Since late in the fall of 2011, the broiler industry has undergone a significant reduction. This data seems to indicate a possible a return to an expansion phase.

Young turkey slaughter also rose by 7% over February of the prior year. When coupled with the positive turn in broiler trends, the early-stage improvements across the poultry sector, if sustained, could help ensure strong, stable demand for US corn.