June 30, 2009

US poultry producers can expect a good season with demand rising on low prices and as consumers prefer cheaper sources of protein, but rising feed costs could be an obstacle to profit margins.

Consumers are rediscovering the virtues of chicken, said Richard Lobb, communications director for the National Chicken Council (NCC) in Washington.

But feed costs remain a concern for producers, Lobb said.

Corn and soy prices reached a historic high last summer before falling significantly, but oil prices is rising again and with it, prices for ethanol and corn.

While corn and soy prices have declined significantly after hitting unprecedented highs last year, the prices are still about twice their average historical level and they are moving up again, Lobb said.

Producers and the chicken industry have to keep a close eye on corn and soy prices, especially the former which has become linked to the price of oil, Lobb said.