June 30, 2011


US turkey industry hurt by rising corn prices



The US Senate Committee on Agriculture, Nutrition and Forestry was told that the current increase in feed prices due to short corn supply caused by the federal ethanol mandate has created significant uncertainty in the US turkey industry.


Rick Sietsema, partner and chief financial officer of Sietsema Farms in Allendale, Michigan, US, said that the turkey industry was looking for reform of the existing ethanol policy.


Corn has risen from US$4 per bushel to more than US$7 in barely a year.


Feed accounts for 70% of the cost of raising a turkey, and corn is 70% of the feed ration.


Sietsema Farms, a member of Michigan Turkey Producers Coop., raises one quarter of the 4.6 million turkeys produced and marketed both domestically and internationally by the co-operative.


Another challenge facing the industry is USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) proposed marketing rule, said Sietsema, as the competitive injury provision in the proposed rule will make it easier to sue or bring regulatory action against livestock and poultry processors.


Also of concern is the provision requiring processors to virtually guarantee growers they can recoup 80% of their capital investments. Sietsema added that studies have found the proposed rule would have a negative impact of more than US$360 million annually in the turkey industry.

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