US meat prices will keep rising unless ethanol out of the picture

Food inflation is just beginning and will continue for many months unless ethanol policies are changed, warned poultry and meat industry leaders in statements issued today.

 

The National Chicken Council, National Turkey Federation and the American Meat Institute cited as evidence the recently-released Producer Price Index (PPI), which showed the highest year-over-year increase in 27 years.

 

The PPI rose 1.2 percent in July, after increasing 1.8 percent in June. The increase was more than twice the 0.5 percent gain that economists expected.

 

During the period, beef prices jumped by 7.4 percent, the biggest increase in nearly four years while milk prices rose by 5 percent, the largest gain in a year.

 

Corn prices were over 80 percent higher than last year, contributing to a 41.8 percent increase in prepared animal feeds.

 

The Producer Price Index is further evidence that the poultry industry is one of the many businesses bearing the brunt of misguided ethanol policies, said Bill Roenigk, senior vice president and chief economist for the National Chicken Council.

 

The rise in chicken prices was tame in comparison to feed prices, which has risen 41.8 percent over the past year, Roenigk said, dismissing the notion that with the recent drop in grain prices, relief is at hand.

 

As long as access to affordable feed is compromised, producers and consumers alike will be denied the price relief so desperately needed, he said.

 

Joel Brandenberger, president of the National Turkey Federation stated that the cost of meat and poultry production continues to rise dramatically, and this is probably just the beginning.

 

All indications are that soaring feed costs are going to force producers to raise prices and make significant production cutbacks in the coming months, or risk going out of business, he said.