November 17, 2009

US poultry sector urges for the release of more land for grain

More than 100 companies and organisations in the US poultry industry have sent a letter to the USDA asking for a modification of its Conservation Reserve Programme (CRP) rules due to concerns of this year's grain harvest.

This year's corn and soy harvest have been delayed by poor weather conditions, which reduced projected yields and crop quality. As a result, grain prices for meat and poultry producers could see a sharp increase again; a situation the producers would loathe to find themselves in.

The letter calls for increased flexibility for producers to remove non-highly environmentally sensitive land prior to CRP contract expiration when crop supply disruptions and growing market demand warrant.

Current rules say that producers wishing to bring CRP land into production prior to contract expiration must repay 100 percent of the CRP rental payments received over the life of their contracts, including interests and liquidated damages.

The letter asks the USDA to create a new, more flexible long-term framework for the CRP under which the most environmentally sensitive lands would continue to be ineligible for early contract termination.

Additionally, the USDA should lift restrictions on producing crops on other, less environmentally sensitive CRP lands to give producers the option to respond to periods of low supplies, as well as growing and shifting demand "in an intensely competitive global environment".

The letter was submitted by the Alliance for Agricultural Growth and Competitiveness (AAGC) and signed by Tyson Foods, Perdue Farms, the National Chicken Council and the National Turkey Federation, among many others.