May 16, 2008

US chicken industry may see corn hit US$8

The US chicken sector, which has trimmed production due to high feed costs, may see corn prices to hit US$8 per bushel this year, seen to further reduce chicken output by 3-4 percent.

Pilgrim's Pride Corporation chief executive Clint Rivers said Thursday that the chicken industry might be placing corn prices around US$6 per bushel when it has the potential to rise as much as US$8 per bushel.

To cope with higher feed costs, Rivers estimates a needed 3 to 4 percent drop in US chicken production.

Meanwhile, Tyson Foods also predicts less chicken and more expensive prices on supermarkets this year as higher feed prices are passed on to consumers.

Tyson chief executive Richard Bond said the US chicken industry has reduced production in reaction to higher feed prices.

The company blamed the skyrocketing corn prices to diversion of corn use to fuel production.

This year, corn prices have exceeded US$6 per bushel, the highest ever. Livestock producers have been worried that prices could go even higher if there is any disruption to this year's US corn crop.