September 16, 2011

 

US chicken companies express corn price concerns to Congress

 

 

A spokesman for the National Chicken Council told Congress that the soaring price and limited supply of corn is affecting chicken companies' profitability.

 

Harrison Poultry CEO Michael Welch told the Livestock, Dairy and Poultry Subcommittee of the House Committee on Agriculture that much of the squeeze has resulted from government-mandated demand from the ethanol industry and reiterated his industry's call for the federal government to stop subsidising corn-based ethanol.  He said Congress should change "the rules of the game" to allow animal agriculture producers to compete more fairly for the limited supplies of corn expected over the next few years.

 

"Included in this effort must be a safety valve‚ to adjust the Renewable Fuels Standard (the ethanol mandate) when there is a shortfall in corn supplies," Welch said. "In addition, a plan should be implemented to allow a reasonable number of good, productive cropland acres to opt out of the Conservation Reserve Programme (CRP) on a penalty-free basis."

 

The CRP pays farmers to take cropland out of production. Welch pointed to a report from the Farm Foundation that concluded the existing policy is "designed to reduce supply, restrict land use and increase demand to help increase and stabilise farm incomes."

 

"That policy was developed because the US has generally been blessed with the ability to produce more than could be consumed at profitable prices for producers," the Farm Foundation report said.  "A shift to a policy of shortage‚ would emphasise programmes that stimulate supply and do not subsidise demand with taxpayer funds or political mandates."

 

Welch urged the committee to support the report's conclusion.

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